Exhibit 10.24


    EXHIBIT
      10.24

    


    FREEPORT-MCMORAN
      COPPER & GOLD INC.

    2004
      DIRECTOR COMPENSATION PLAN

    


    


    1.  Purpose
      of the Plan.

     

    The
      purpose of the Freeport-McMoRan Copper & Gold Inc. 2004 Director
      Compensation Plan is to promote the interests of the Company and its
      stockholders by strengthening the Company’s ability to attract, motivate and
      retain directors of experience and ability, and to encourage the highest level
      of director performance by providing directors with (i) a proprietary interest
      in the Company’s financial success and growth through the annual grants of
      Options to purchase the Company's Common Stock and Restricted Stock Units and
      the ability to elect to receive compensation in shares of Common Stock and
      (ii)
      the ability to defer compensation. In recognition of their continued service
      to
      the Company and the Board, the Plan also provides for the issuance of Awards
      to
      each of the Advisory Directors to replace awards that have or will be terminated
      as a result of their resignations from the Board. 

     

    2.  Definitions.

     

    For
      purposes of this Plan, the following terms shall have the meanings
      indicated:

     

    2.1  “Advisory
      Director” means a person designated as such by the Board.

     

    2.2  “Award”
      means any Option, Restricted Stock Unit or Stock Appreciation Right granted
      under this Plan.

     

    2.3  “Award
      Notice” means any written or electronic notice of grant, evidencing any
      Award.

     

    2.4  “Board”
      means the Board of Directors of the Company.

     

    2.5  “Cash
      Compensation” means the annual cash retainer paid to an Eligible Director and
      any meeting fees, but does not include any expense reimbursement paid to an
      Eligible Director.

     

    2.6  “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 2.6(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 2.6(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 2.6(a)(iii) hereof; or

     

    (ii)  individuals,
      excluding the representatives of Rio Tinto (as defined below), who, as of the
      Effective Date, constitute the Board (the “Incumbent Board”) cease for any
      reason to constitute at least a majority of the Board; provided, however, that
      any individual, excluding any representative of Rio Tinto, becoming a director
      subsequent to the Effective Date whose election, or nomination for election
      by
      the Company’s stockholders, 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; provided, that if that certain Agreement dated as of May 2, 1995
      by
      and between the Company and Rio Tinto remains in effect as it may be amended
      from time to time with respect to the Post Transaction Corporation, then Rio
      Tinto and its Affiliates may Beneficially Own any amount less than the number
      of
      shares of the Post Transaction Corporation that could elect a majority of the
      directors of the Post Transaction Corporation if all directors were to be
      elected at a single meeting, 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 stockholders of the Company of a complete liquidation or dissolution
      of
      the Company.

     

    (b)  As
      used
      in this Section 2.6 and elsewhere in this Plan, the following terms have the
      meanings indicated:

     

    (i)  “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” (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” means any capital stock of the Company that is then entitled to
      vote for the election of directors.

     

    (iv)  “Effective
      Date” means the date this Plan is approved by the Company’s
      stockholders.

     

    (v)  “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.

     

    (vi)  “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.

     

    (vii)  “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.

     

    (viii)  “Threshold
      Percentage”: (A) As long as that certain Agreement dated as of May 2, 1995, by
      and between the Company and Rio Tinto Indonesia Limited (“Rio Tinto”) remains in
      effect as it may be amended from time to time, “Threshold Percentage” means with
      respect to Rio Tinto and its Affiliates, that percentage of Common Stock that
      would result in Rio Tinto and its Affiliates having Beneficial Ownership of
      shares of Company Voting Stock equal to or greater than the Majority Shares;
      provided that, solely for purposes of such calculation, the shares of Company
      Voting Stock issuable upon exercise of warrants, options or other rights, or
      upon conversion or exchange of convertible or exchangeable securities, owned
      by
      Rio Tinto and its Affiliates, will be treated as outstanding Company Voting
      Stock. (B) With respect to any other Person and its Affiliates, “Threshold
      Percentage” means 30% of all then outstanding Common Stock.

     

    2.7  “Committee”
      means the Corporate Personnel Committee of the Board or a subcommittee thereof.
      The Committee shall consist of not fewer than two members of the Board of
      Directors, each of whom shall (a) qualify as a “non-employee director” under
      Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the “1934
      Act”), or any successor rule, and (b) qualify as an “outside director” under
      Section 162(m) of the Internal Revenue Code of 1986, as amended from time to
      time (the “Code”), and the regulations promulgated thereunder.

     

    2.8  “Common
      Stock” means the Class B common stock, $0.10 par value per share, of the
      Company.

     

    2.9  “Company”
      means Freeport-McMoRan Copper & Gold Inc., a Delaware
      corporation.

     

    2.10  “Director”
      means each member of the Board who is not employed by the Company or any of
      its
      subsidiaries.

     

    2.11  “Eligible
      Director” means each Director and Advisory Director, and includes, for purposes
      of Sections 6.6 and 7.6 hereof only, former Directors and Advisory Directors
      who
      continue to provide services to the Company or a subsidiary of the Company
      pursuant to a consulting or other arrangement.

     

    2.12  “Fair
      Market Value.” Except as provided below in connection with a cashless exercise
      through a broker, for any purpose relevant under the Plan, the fair market
      value
      of a share of Common Stock or any other security shall be the average of the
      high and low quoted per share or security sale prices on the Composite Tape
      for
      New York Stock Exchange-Listed Stocks on the date in question or, if there
      are
      no reported sales on such date, on the last preceding date on which any reported
      sale occurred. If on the date in question the shares of Common Stock or other
      securities in question are not listed on such Composite Tape, the fair market
      value shall be the average of the high and low quoted sale prices on the New
      York Stock Exchange on such date or, if no sales occurred on such date, on
      the
      last previous day on which a sale on the New York Stock Exchange is reported.
      In
      the context of a cashless exercise through a broker, the fair market value
      shall
      be the price at which the shares of Common Stock are actually sold.

     

    2.13  “Grant
      Date” means June 1, 2004, and each subsequent anniversary thereof throughout the
      term of this Plan, provided shares of Common Stock remain available for issuance
      hereunder.

     

    2.14  “Participant”
      means any individual granted an Award under this Plan.

     

    2.15  “Option”
      means a stock option granted under Section 5 of this Plan that does not satisfy
      the requirements of Section 422 of the Code.

     

    2.16  “Plan”
      means the Freeport-McMoRan Copper & Gold Inc. 2004 Director Compensation
      Plan as set forth herein and as amended, restated, supplemented or otherwise
      modified from time to time.

     

    2.17  “Restricted
      Stock Unit” or “RSU” means an award of restricted stock units granted under
      Section 5 of this Plan.

     

    2.18  “Stock
      Appreciation Right” or “SAR” means an award of stock appreciation rights granted
      under Section 5 of this Plan.

     

    3.  Shares
      of Common Stock Subject to the Plan.

     

    3.1  Subject
      to the adjustment provisions of Section 11, the aggregate number of shares
      of
      Common Stock that may be issued pursuant to the terms of the Plan shall be
      1,000,000. Shares issued or delivered upon the exercise of Options or the
      vesting of RSUs may be either authorized but unissued shares or shares issued
      and thereafter acquired by the Company.

     

    3.2  To
      the
      extent any shares of Common Stock subject to an Award are not issued because
      the
      Award is forfeited or cancelled or the Award is paid in cash, such shares shall
      again be available for grant pursuant to Awards granted under the Plan. If
      the
      exercise price of any Option granted under this Plan is satisfied by tendering
      shares of Common Stock to the Company (by either actual delivery or by
      attestation), only the number of shares of Common Stock issued net of the shares
      of Common Stock tendered shall be deemed delivered for purposes of determining
      the maximum number of shares of Common Stock available for delivery under the
      Plan.

     

    4.  Administration
      of the Plan.

     

    4.1  The
      Plan
      shall be administered by the Committee, which shall have the power to interpret
      the Plan and, subject to its provisions, to prescribe, amend and rescind Plan
      rules and to make all other determinations necessary for the Plan’s
      administration. 

     

    4.2  All
      action taken by the Committee in the administration and interpretation of the
      Plan shall be final and binding upon all parties. No member of the Committee
      will be liable for any action or determination made in good faith by the
      Committee with respect to the Plan or any Award.

     

    4.3  The
      Committee does not have the authority to make discretionary grants of Awards
      under the Plan. Grants may be made only as provided in Section 5
      hereof.

     

    5.  Grant
      of Options,
      Restricted Stock Units and Stock Appreciation Rights.

     

    5.1  On
      each
      Grant Date, each Eligible Director shall be automatically granted

     

    (a)  an
      Option
      to acquire 10,000 shares of Common Stock; and 

     

    (b)  2,000
      Restricted Stock Units.

     

    5.2  While
      the
      Plan remains in effect and shares of Common Stock remain available for issuance
      hereunder, upon any person’s initial election or appointment as an Eligible
      Director, otherwise than at an annual meeting of stockholders, such person
      shall
      be granted an Option and RSUs as follows:

     

    (a)  If
      less
      than six full calendar months have elapsed since the most recent Grant Date,
      then the Eligible Director shall receive an Option to acquire 10,000 shares
      of
      Common Stock and 2,000 Restricted Stock Units; or

     

    (b)  If
      six or
      more full calendar months have elapsed since the most recent Grant Date, then
      the Eligible Director shall receive an Option to acquire 5,000 shares of Common
      Stock and 1,000 Restricted Stock Units.

     

    5.3  On
      February 9, 2004, two Directors resigned from the Board and were appointed
      Advisory Directors. All outstanding incentive awards previously granted to
      such
      directors under the Company’s 1995 Stock Option Plan for Non-Employee Directors
      and the Company’s Stock Appreciation Rights Plan were or will be terminated
      under the terms of those plans as a result of such individuals’ resignations
      from the Board. Accordingly, on May 9, 2004, the following Advisory Directors
      will receive a one-time grant of Options and SARs as described below to replace
      the previously granted awards that have or will terminate.

     

    (a)  Gabrielle
      K. McDonald shall receive Options to acquire 79,517 shares of Common Stock
      and
      52,131 SARs related to an equal number of shares of Common Stock, which Options
      and SARs shall have the specific terms described on Annex A hereto.

     

    (b)  J.
      Stapleton Roy shall receive Options to acquire 22,500 shares of Common Stock
      and
      14,751 SARs related to an equal number of shares of Common Stock, which Options
      and SARs shall have the specific terms described on Annex A hereto.

     

    6.  Terms
      and Conditions of Options
      and Stock Appreciation Rights.

     

    6.1  Unless
      exercisability is accelerated as provided in Section 12.1 hereof and except
      for
      grants described in Section 5.3 hereof, the Options shall become exercisable
      in
      one-quarter increments on the first, second, third and fourth anniversaries
      of
      the applicable Grant Date.

     

    6.2  Unless
      terminated earlier as provided in Sections 5.3, 6.6 or 12.2, the Options shall
      expire ten years following the applicable Grant Date.

     

    6.3  Except
      for grants described in Section 5.3, the exercise price of the Options granted
      to Eligible Directors shall be equal to the Fair Market Value, as defined
      herein, of a share of Common Stock on the applicable Grant Date.

     

    6.4  Options
      must be exercised by delivering written notice to the Company or any person
      or
      entity designated by the Company on forms approved by the Company and payment
      of
      the purchase price thereof in full. Any such exercise shall be effective upon
      receipt by the Company or its designee of such notice and such payment. Unless
      the Committee shall determine otherwise in any particular case, such payment
      may
      be made by (a) cash, (b) cash equivalent (which may be the personal check of
      the
      exercising holder of the Option), (c) by tendering shares of Common Stock,
      either by actual delivery or by attestation, that are owned by such holder
      and
      that have been held by the Participant or eligible transferee for at least
      six
      months, or (d) instructing a broker approved by the Company to sell shares
      of
      Common Stock acquired upon the exercise of the option and to remit to the
      Company a sufficient portion of the cash proceeds to pay the exercise price;
      or
      (e) a combination thereof, in each case having an aggregate Fair Market Value
      equal to the aggregate exercise price of the portion of the Option being
      exercised.

     

    6.5  Any
      provision of this Plan or any Award Notice 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. Notwithstanding the foregoing, except
      for
      adjustments permitted under Sections 11 and 12.2 hereof, no action by the
      Committee shall cause a reduction in the exercise price of Options granted
      under
      the Plan without the approval of the stockholders of the Company. The
      determinations of value under this subparagraph shall be made by the Committee
      in its sole discretion.

     

    6.6  
(a)     
      For
      purposes of this Section 6.6, if a Participant continues to provide services
      to
      the Company or a subsidiary of the Company pursuant to a consulting or other
      arrangement, the Participant will not “cease to be an Eligible Director” until
      such time as the Participant no longer provides such services. 

     

    (b)  If
      a
      Participant ceases to be an Eligible Director for any reason other than death,
      retirement from the Board or disability (as defined in Section 6.6(f)), all
      of
      the Options and SARs granted to such Participant while serving as an Eligible
      Director shall be terminated except that any Options and SARs, to the extent
      then exercisable, may be exercised by the holder thereof within three months
      after such Participant ceases to be an Eligible Director, but not later than
      the
      termination date of the Award. 

     

    (c)  If
      a
      Participant ceases to be an Eligible Director by reason of the Participant’s
      retirement from the Board or disability (as defined in Section 6.6(f)), all
      of
      the Options and SARs granted to such Participant while serving as an Eligible
      Director shall be terminated except that any Options and SARs, to the extent
      then exercisable or exercisable within one year thereafter, may be exercised
      by
      the holder thereof within three years after such Participant ceases to be an
      Eligible Director, but not later than the termination date of the
      Award.

     

    (d)  If
      a
      Participant dies while serving as an Eligible Director, all Options and SARs
      granted to such Participant shall be terminated, except that any Options and
      SARs, to the extent exercisable by the holder thereof at the time of such death
      or exercisable within one year thereafter, may be exercised until the third
      anniversary of the date of such death, but not later than the termination date
      of the Award, by the holder thereof, the Participant’s estate, or the person
      designated in the Participant’s last will and testament, as
      appropriate.

     

    (e)  If
      a
      Participant dies after ceasing to be an Eligible Director, all of the Options
      and SARs granted to such Participant shall be terminated, except that any
      Options and SARs, to the extent still outstanding and exercisable by the holder
      thereof at the time of such death, may be exercised until the third anniversary
      of the date the Participant ceased to be an Eligible Director, but not later
      than the termination date of the Award, by the holder thereof, the Participant’s
      estate, or the person designated in the Participant’s last will and testament,
      as appropriate.

     

    (f)  For
      purposes of this Section 6.6, a “disability” shall occur if (a) a physical or
      mental illness renders the Participant incapable of satisfactorily discharging
      his or her duties and responsibilities as a Director for a period of 90
      consecutive days, and (b) a duly qualified physician chosen by the Company
      and
      reasonably acceptable to the Participant or his or her legal representative
      certifies in writing that the Participant has become disabled.

     

    6.7  A
      Stock
      Appreciation Right is a right to receive, without payment to the Company, for
      each share of Common Stock to which the SAR relates, an amount in cash equal
      to
      the excess, if any, of the Fair Market Value of a Share on the date of exercise
      of the SAR over the grant price. SARs will only be granted under the Plan in
      accordance with Section 5.3 hereof.

     

    7.  Terms
      and Conditions of Restricted Stock Units.

     

    7.1  Subject
      to the terms, conditions, and restrictions set forth herein, each RSU granted
      under Section 5.1 hereof represents the right to automatically receive from
      the
      Company, on the respective scheduled vesting date for such RSU, one share (a
      “Share”) of Common Stock, free of any restrictions and all cash, securities and
      property credited to or deposited in the Participant’s Dividend Equivalent
      Account (as defined in Section 7.4) with respect to such RSU.

     

    7.2  Unless
      vesting is accelerated as provided in Section 7.6 or 12.1, the RSUs shall vest
      in one-quarter increments on the first, second, third and fourth anniversaries
      of the applicable Grant Date. Upon vesting, a Participant shall be issued the
      Shares to which the Participant is entitled, unless the Participant has elected
      to defer receipt as permitted herein.

     

    7.3  Except
      as
      provided in Section 7.4, an RSU shall not entitle the Participant to any
      incidents of ownership (including, without limitation, dividend and voting
      rights) (a) in any Share until the RSU shall vest and the Participant
      shall
      be issued a Share to which such RSU relates nor (b) in any cash, securities
      or property credited to or deposited in a Dividend Equivalent Account related
      to
      such RSU until such RSU vests.

     

    7.4  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 (a) the amount of any cash dividends and (b) the
      amount
      equal to the Fair Market Value of any Shares, 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 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 terms of the Plan and the applicable Award Notice. The
      “Account Rate” shall be the prime commercial lending rate announced from time to
      time by JP Morgan Chase Bank 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.

     

    7.5 No
      later
      than December 31st
      if the
      year prior to the applicable Grant Date of any RSUs, a Participant may elect,
      in
      accordance with procedures established by the Committee, that 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; provided,
      however, that the deferral period shall end no later than 10 years after the
      date that the Participant ceases to be an Eligible Director (“Termination”) for
      any reason. In the event of any Termination, a distribution of all amounts
      due
      hereunder shall be made in full to the Participant or his or her designated
      beneficiary as soon as administratively possible following the date the
      Participant is scheduled to receive a distribution hereunder. All securities
      or
      property comprising Property Distributions deposited in such Dividend Equivalent
      Account related to such RSUs shall, however, be distributed to the Participant
      as soon as practicable after the vesting date for such RSUs, irrespective of
      such deferral election. 

     

    7.6  
(a)      Except
      as
      otherwise set forth in Section 7.6(b), all unvested RSUs, 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 Director, unless
      the Participant continues providing services to the Company pursuant to a
      consulting or other arrangement.

     

    (b)  If
      a
      Participant ceases to be an Eligible Director by reason of the Participant’s
      death, retirement or disability (as defined in Section 7.6(d)), all unvested
      RSUs and all amounts credited to or property deposited in the Participant’s
      Dividend Equivalent Accounts with respect to such RSUs shall vest as of the
      date
      the Participant ceases to be an Eligible Director.

     

    (c)  For
      purposes of this Section 7.6, if a Participant continues to provide services
      to
      the Company or a subsidiary of the Company pursuant to a consulting or other
      arrangement, the Participant will not “cease to be an Eligible Director” until
      such time as the Participant no longer provides such services.

     

    (d)  For
      purposes of this Section 7.6, a “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.


     

    8.  Election
      to Have Annual Retainer Paid in Common Stock.

     

    8.1  Each
      Eligible Director may make a stock purchase election on a form approved by
      the
      Committee (the “Stock Purchase Election Form”) directing that up to one hundred
      percent of his or her annual retainer, in twenty-five percent increments, be
      allocated to the purchase of Common Stock on his or her behalf. 

     

    8.2  A
      stock
      purchase election will be effective on the first date that the portion of the
      annual retainer subject to the election is paid that is at least five business
      days after the date the Stock Purchase Election Form is filed with the Company’s
      Human Resources Department in the manner required by the Company. Stock purchase
      elections may be revoked or modified effective on the first date that the
      portion of the annual retainer is paid that is at least five business days
      following the date the revocation or modified election is filed with the Company
      in the manner required by the Company.

     

    8.3  If
      an
      Eligible Director has timely submitted a satisfactory Stock Purchase Election
      Form, the Eligible Director shall be issued that number of whole shares of
      Common Stock, rounded down if necessary, equal to the amount of the Director's
      retainer to be allocated to the purchase of Common Stock on that date divided
      by
      the Fair Market Value of a share of Common Stock as of the trading date
      immediately preceding the issue date.

     

    9.  Deferral
      of Cash Compensation.

     

    9.1  Each
      Eligible Director may elect to defer his or her Cash Compensation that is not
      used to purchase Common Stock pursuant to Section 8 hereof, in twenty-five
      percent increments, to a deferred compensation account (a “Deferred Compensation
      Account”) established for the Eligible Director’s benefit. An election to defer
      Cash Compensation hereunder shall be made by means of a form approved by the
      Company (the “Deferral Election Form”) and shall be effective only with respect
      to Cash Compensation earned on or after January 1st
      of the
      fiscal year following the receipt of the Deferral Election Form by the Company’s
      Human Resources Department. 

     

    9.2  An
      Eligible Director may revoke or modify an election made pursuant to Section
      9.1
      with respect to deferrals of Cash Compensation to be earned in the future and
      such revocation or modification shall take effect one year following receipt
      of
      the written revocation or modification by the Committee and subject to such
      other rules as may be established by the Committee.

     

    10.  Deferred
      Compensation Accounts.

     

    10.1  A
      Deferred Compensation Account shall be established for each Eligible Director
      who executes a Deferral Election Form.

     

    10.2  An
      Eligible Director’s Deferred Compensation Account shall be credited with that
      portion of the Eligible Director’s Cash Compensation that the Eligible Director
      has elected to defer to his or her Deferred Compensation Account pursuant to
      Section 9.1 as of the date such Compensation would otherwise have been paid
      to
      the Eligible Director.

     

    10.3  All
      amounts in an Eligible Director’s Deferred Compensation Account shall accrue
      interest at a rate equal to the prime commercial lending rate announced from
      time to time by JP Morgan Chase (compounded quarterly) or by another major
      national bank headquartered in New York, New York and designated by the
      Committee.

     

    10.4  Amounts
      credited to an Eligible Director's Deferred Compensation Account shall be
      distributed in either a single lump sum or annual installments (not to exceed
      ten), as designated by the Eligible Director in his or her applicable Deferral
      Election Form. Distribution of a Deferred Compensation Account shall be made
      (in
      the case of a lump sum payment) or commence (in the case of installment
      payments) as follows: (i) as soon as administratively possible following the
      date the Eligible Director ceases to be an Eligible Director, or (ii) on such
      earlier date as may be specified by the Eligible Director in his or her Deferral
      Election Form, provided such date is at least two years after the date the
      Deferral Election Form is received by the Committee. Notwithstanding an Eligible
      Director’s election pursuant to his or her applicable Deferral Election Form, a
      distribution of all amounts remaining unpaid in the Deferred Compensation
      Account shall be made as soon as administratively possible after the tenth
      anniversary of the date the Eligible Director ceases to be an Eligible Director.
      If an Eligible Director elects to have his or her Deferred Compensation Account
      distributed in installments, the amount of the first installment shall be a
      fraction of the value of the Eligible Director's Deferred Compensation Account,
      the numerator of which is one and denominator of which is the total number
      of
      installments elected, and the amount of each subsequent installment shall be
      a
      fraction of the value (including income credited pursuant to Section 10.3)
      on
      the date preceding each subsequent payment, the numerator of which is one and
      the denominator of which is the total number of installments elected minus
      the
      number of installments previously paid.

     

    10.5  In
      the
      event of the death of an Eligible Director prior to the distribution of his
      or
      her Deferred Compensation Account in full, the value of such Deferred
      Compensation Account shall be determined as of the date of death and such amount
      shall be distributed in a single lump sum payment to the Eligible Director's
      estate or designated beneficiary as soon as administratively feasible
      thereafter.

     

    10.6  At
      least
      once per year, each Eligible Director who has executed a Deferral Election
      Form
      shall be provided with a statement of his or her Deferred Compensation
      Account.

     

    10.7  The
      right
      of any Eligible Director to receive distributions under the provisions of this
      Section 10 shall constitute an unsecured claim against the general assets of
      the
      Company.

     

    11.  Adjustment
      Provisions.

     

    In
      the
      event of any recapitalization, reclassification, stock dividend, stock split,
      combination of shares or other change in the Common Stock, all limitations
      on
      numbers of shares of Common Stock provided in this Plan, and the number of
      shares subject to outstanding Options, SARs, RSUs and stock purchase elections,
      shall be equitably adjusted in proportion to the change in outstanding shares
      of
      Common Stock. In addition, in the event of any such change in the Common Stock,
      the Committee shall make any other adjustment that it determines to be
      equitable, including without limitation adjustments to the exercise price of
      any
      Option or base price of any SAR in order to provide Participants with the same
      relative rights before and after such adjustment. 

     

    12.  Change
      of Control.

     

    12.1  Upon
      a
      Change of Control, or immediately prior to the closing of a transaction that
      will result in a Change of Control if consummated, all outstanding Options
      and
      SARs granted pursuant to this Plan shall automatically become fully vested
      and
      exercisable. If a Change of Control also qualified as 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 under
      Section 409A of the Code and any related implementing regulations or guidance,
      then all outstanding RSUs shall become fully vested. 

     

    12.2  No
      later
      than 30 days after a Change of Control, the Committee, acting in its sole
      discretion without the consent or approval of any Participant (and
      notwithstanding any removal or attempted removal of some or all of the members
      thereof as directors or Committee members), may act to effect one or more of
      the
      alternatives listed below, which may vary among individual Participants and
      which may vary among Options, SARs and RSUs held by any individual
      Participant:

     

    (a)  require
      that all outstanding Options and SARs be exercised on or before a specified
      date
      (before or after such Change of Control) fixed by the Committee, after which
      specified date all unexercised Options and SARs and all rights of Participants
      thereunder shall terminate,

     

    (b)  make
      such
      equitable adjustments to Awards then outstanding as the Committee deems
      appropriate to reflect such Change of Control (provided, however, that the
      Committee may determine in its sole discretion that no adjustment is necessary),
      

     

    (c)  provide
      for mandatory conversion or exchange of some or all of the outstanding Options
      and SARs held by some or all Participants as of a date, before or after such
      Change of Control, specified by the Committee, in which event such Options
      and
      SARs shall be deemed automatically cancelled and the Company shall pay, or
      cause
      to be paid, to each such Participant an amount of cash per share equal to the
      excess, if any, of the Change of Control Value of the shares subject to such
      Option or SAR, as defined and calculated below, over the per share exercise
      price of such Options and SARs or, in lieu of such cash payment, the issuance
      of
      Common Stock or securities of an acquiring entity having a Fair Market Value
      equal to such excess, or

     

    (d)  provide
      that thereafter, upon any exercise of an Option that entitles the holder to
      receive Common Stock, the holder shall be entitled to purchase or receive under
      such Option, in lieu of the number of shares of Common Stock then covered by
      such Option, the number and class of shares of stock or other securities or
      property (including, without limitation, cash) to which the holder would have
      been entitled pursuant to the terms of the agreement providing for the
      reorganization, share exchange, merger, consolidation or asset sale, if,
      immediately prior to such Change of Control, the holder had been the record
      owner of the number of shares of Common Stock then covered by such
      Option.

     

    12.3  For
      the
      purposes of any conversions or exchanges under paragraph (c) of Section 12.2,
      the “Change of Control Value” shall equal the amount determined by whichever of
      the following items is applicable:

     

    (a)  the
      per
      share price to be paid to holders of Common Stock in any such merger,
      consolidation or other reorganization,

     

    (b)  the
      price
      per share offered to holders of Common Stock in any tender offer or exchange
      offer whereby a Change of Control takes place, or

     

    (c)  in
      all
      other events, the Fair Market Value of a share of Common Stock, as determined
      by
      the Committee as of the date determined by the Committee to be the date of
      conversion or exchange.

     

    12.4  In
      the
      event that the consideration offered to stockholders of the Company in any
      transaction described in this Section 12 consists of anything other than cash,
      the Committee shall determine the fair cash equivalent of the portion of the
      consideration offered that is other than cash.

     

    13.  General
      Provisions.

     

    13.1  Nothing
      in the Plan or in any instrument executed pursuant to the Plan will confer
      upon
      any Eligible Director any right to continue as an Eligible Director or
      affect
      the right of the Board to remove any Eligible Director.

     

    13.2  No
      shares
      of Common Stock will be issued or transferred pursuant to an Award unless and
      until all then-applicable requirements imposed by federal and state securities
      and other laws, rules and regulations and by any regulatory agencies having
      jurisdiction, and by any stock exchanges upon which the Common Stock may be
      listed, have been fully met to the Company’s satisfaction. As a condition
      precedent to the issuance of shares pursuant to an Award, the Company may
      require the Participant to take any reasonable action to meet such requirements.
      

     

    13.3  No
      Participant and no beneficiary or other person claiming under or through such
      Participant will have any right, title or interest in or to any shares of Common
      Stock allocated or reserved under the Plan or subject to any Award except as
      to
      such shares of Common Stock, if any, that have been issued or transferred to
      such Participant.

     

    13.4  No
      Awards
      granted hereunder, including amounts notionally credited to the Participant’s
      Dividend Equivalent Account, and any Property Distributions deposited in such
      Dividend Equivalent Account, 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 Notice or
      an
      amendment thereto; or (iv) if permitted by the Committee and so provided in
      the
      Award Notice or an amendment thereto, Options may be transferred or assigned
      (w)
      to Immediate Family Members, (x) 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, (y) 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 (z) 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 (x), (y) or (z) 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 13.4.

     

    13.5  Each
      Award shall be evidenced by an Award Notice.

     

    14.  Amendment,
      Discontinuance or Termination of the Plan.

     

    14.1  The
      Board
      may amend or discontinue the Plan at any time; provided, however, that no such
      amendment may

     

    (a)  without
      the approval of the stockholders, (i)
      increase, subject to adjustments permitted herein, the maximum number of shares
      of Common Stock that may be issued through the Plan, (ii)
      materially increase the benefits accruing to Participants under the Plan,
(iii)
      materially expand the classes of persons eligible to participate in the Plan,
      (iv)
      expand
      the types of awards available under the Plan, (v)
      materially extend the term of the Plan, (vi)
      materially change the method for determining the exercise price of an Award,
      or
(vii)
      amend
      Section 6.5 to permit a reduction in the exercise price of Options;
      or

     

    (b)  materially
      impair, without the consent of the recipient, an Award previously
      granted.

     

    14.2  Term
      of the Plan.
      Subject
      to Section 14.1, no Awards may be granted under the Plan later than May 6,
      2014,
      which is ten years after the Effective Date of the Plan; provided, however,
      that
      Awards granted prior to such date shall remain in effect until all such Awards
      have either been satisfied, expired or canceled under the terms of the
      Plan.

     

    


     



    ANNEX
      A to 2004 Director Compensation Plan

    


    Special
      Awards to be Granted May 9, 2004

    


    Gabrielle
      K. McDonald,
      Advisory Director, shall receive the following Options and SARs:

    


    
      	
              Number
                of

              Options/SARs

            	
              Exercise

              Price

            	
              Vesting
                Schedule

            	
              Termination

              Date*

            
	
               

              7,017
                options

            	
               

              $20.2672

            	
               

              May
                9, 2004

            	
               

              May
                1, 2005

            
	
              10,000
                options

            	
              $26.6875

            	
              May
                9, 2004

            	
              August
                1, 2005

            
	
              10,000
                options

            	
              $30.4375

            	
              May
                9, 2004

            	
              August
                1, 2006

            
	
              10,000
                options

            	
              $29.1563

            	
              May
                9, 2004

            	
              August
                1, 2007

            
	
              10,000
                options

            	
              $17.3125

            	
              May
                9, 2004

            	
              August
                1, 2009

            
	
              5,000
                options

            	
              $
                9.0938

            	
              50%
                on May 9, 2004, and 50% on August 1, 2004

            	
              August
                1, 2010

            
	
              7,500
                options

            	
              $11.165

            	
              33.3%
                on May 9, 2004, 33.3% on August 1, 2004, and on the next anniversary
                thereof

            	
              August
                1, 2011

            
	
              10,000
                options

            	
              $15.195

            	
              25%
                on May 9, 2004, 25% on August 1, 2004, and on each of the next two
                anniversaries thereof

            	
              August
                1, 2012

            
	
              10,000
                options

            	
              $26.975

            	
              25%
                on August 1, 2004, and on each of the next three anniversaries
                thereof

            	
              August
                1, 2013

            
	 	 	 	 
	
              4,600
                SARs

            	
              $20.2672

            	
              May
                9, 2004

            	
              May
                2, 2005

            
	
              6,556
                SARs

            	
              $26.6875

            	
              May
                9, 2004

            	
              August
                1, 2005

            
	
              6,556
                SARs

            	
              $30.4375

            	
              May
                9, 2004

            	
              August
                1, 2006

            
	
              6,556
                SARs

            	
              $29.1563

            	
              May
                9, 2004

            	
              August
                1, 2007

            
	
              6,556
                SARs

            	
              $17.3125

            	
              May
                9, 2004

            	
              August
                1, 2009

            
	
              3,278
                SARs

            	
              $9.0938

            	
              50%
                on May 9, 2004, and 50% on August 1, 2004

            	
              August
                1, 2010

            
	
              4,917
                SARs

            	
              $11.165

            	
              33.3%
                on May 9, 2004, 33.3% on August 1, 2004, and on the next anniversary
                thereof

            	
              August
                1, 2011

            
	
              6,556
                SARs

            	
              $15.195

            	
              25%
                on May 9, 2004, 25% on August 1, 2004, and on each of the next two
                anniversaries thereof

            	
              August
                1, 2012

            
	
              6,556
                SARs

            	
              $26.975

            	
              25%
                on August 1, 2004 and on each of the next three anniversaries
                thereof

            	
              August
                1, 2013

            


    

    


    J.
      Stapleton Roy,
      Advisory Director, shall receive the following Options and SARs:

    


    
      	
              Number
                of

              Options/SARs

            	
              Exercise

              Price

            	
              Vesting
                Schedule

            	
              Termination

              Date*

            
	
               

              5,000
                options

            	
               

              $11.165

            	
               

              50%
                on August 1, 2004, and on the next anniversary thereof

            	
               

              August
                1, 2011

            
	
              7,500
                options

            	
              $15.195

            	
              33.3%
                on August 1, 2004, and on each of the next two anniversaries
                thereof

            	
              August
                1, 2012

            
	
              10,000
                options

            	
              $26.975

            	
              25%
                on August 1, 2004, and on each of the next three anniversaries
                thereof

            	
              August
                1, 2013

            
	 	 	 	 
	
              3,278
                SARs

            	
              $11.165

            	
              50%
                on August 1, 2004, and on the next anniversary thereof

            	
              August
                1, 2011

            
	
              4,917
                SARs

            	
              $15.195

            	
              33.3%
                on August 1, 2004, and on each of the next two anniversaries
                thereof

            	
              August
                1, 2012

            
	
              6,556
                SARs

            	
              $26.975

            	
              25%
                on August 1, 2004, and on each of the next three anniversaries
                thereof

            	
              August
                1, 2013

            


    

    _______________

    *Unless
      terminated earlier pursuant to the terms of the Plan.