ex10-42.htm


    
      
        

      

    

    Exhibit 10.42

     

    
 

    AMENDED
AND RESTATED

    1999
LONG-TERM PERFORMANCE INCENTIVE PLAN

    OF
FREEPORT-McMoRan COPPER & GOLD INC.

    


    ARTICLE
I

    PURPOSE
OF PLAN

     

    SECTION  1.1. The purpose of the 1999 Long-Term Performance Incentive
Plan of Freeport-McMoRan Copper & Gold Inc. (the “Plan”) is to provide
incentives for senior executives and other service providers whose performance
in fulfilling their responsibilities can have a major impact on the
profitability and future growth of Freeport-McMoRan Copper & Gold Inc. (the
“Company”) and its subsidiaries.

     

    ARTICLE
II

    ADMINISTRATION
OF THE PLAN

     

    SECTION  2.1. Subject
to the authority and powers of the Board of Directors in relation to the Plan as
hereinafter provided, the Plan shall be administered by a Committee designated
by the Board of Directors consisting of two or more members of the
Board.  The Committee shall have full authority to interpret the Plan
and from time to time to adopt such rules and regulations for carrying out the
Plan as it may deem best; provided, however, that the Committee may not exercise
any authority otherwise granted to it hereunder if such action would have the
effect of increasing the amount of any credit to or payment from the Performance
Award Account of any Covered Officer, and provided further that certain
specified actions are permitted to be taken hereunder by individual officers of
the Company.  All determinations by the Committee shall be made by the
affirmative vote of a majority of its members, but any determination reduced to
writing and signed by a majority of the members shall be fully as effective as
if it had been made by a majority vote at a meeting duly called and
held.  All decisions by the Committee pursuant to the provisions of
the Plan and all orders or resolutions of the Board of Directors pursuant
thereto shall be final, conclusive and binding on all persons, including but not
limited to the Participants, the Company and its subsidiaries and their
respective equity holders.

     

    ARTICLE
III

    ELIGIBILITY
FOR AND GRANT OF

    PERFORMANCE
AWARDS

     

    SECTION  3.1. Subject
to the provisions of the Plan, the Committee may from time to time select any of
the following to be granted Performance Awards under the Plan, and determine the
number of Performance Units covered by each such Performance Award: (a) any
person providing services as an officer of the Company or a Subsidiary, whether
or not employed by such entity, including any person who is also a director of
the Company, (b) any employee of the Company or a Subsidiary, including any
director who is also an employee of the Company or a Subsidiary, (c) any officer
or employee of an entity with which the Company or a Subsidiary has contracted
to receive executive, management or legal services who provides services to the
Company or a Subsidiary through such arrangement, (d) any consultant or adviser
to the Company, a Subsidiary or to an entity described in clause (c) hereof who
provides services to the


    
      
        
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    Company
or a Subsidiary through such arrangement and (e) any person who has agreed in
writing to become a person described in clauses (a), (b), (c) or (d) within not
more than 30 days following the date of grant of such person's first Performance
Award under the Plan.  Performance Awards may be granted at different
times to the same individual.

     

    SECTION  3.2. Upon the
grant of a Performance Award to a Participant, the Company shall establish a
Performance Award Account for such Participant and shall credit to such
Performance Award Account the number of Performance Units covered by such
Performance Award.

     

    SECTION  3.3. Subject
to adjustment as provided in Section 5.2 the number of Performance Units
outstanding at any time shall not exceed 4,000,000.  Performance Units
that shall have been forfeited or with respect to which payment has been made
pursuant to Section 4.2 shall not thereafter be deemed to be credited or
outstanding for any purpose of the Plan and may again be the subject of
Performance Awards.

     

    SECTION  3.4. (a)  Notwithstanding
the provisions of Section 3.1, 3.2 and 3.3, all Performance Awards granted to
Covered Officers must be granted no later than 90 days following the beginning
of the calendar year.  No Covered Officer may be granted more than
250,000 Performance Units in any calendar year.

     

    (b) All
Performance Awards to Covered Officers under the Plan will be made and
administered by two or more members of the Committee who are also “outside
directors” within the meaning of Section 162(m).

     

    ARTICLE
IV

    CREDITS
TO AND PAYMENTS FROM PARTICIPANTS’

    PERFORMANCE
AWARD ACCOUNTS

     

    SECTION  4.1. Subject
to the provisions of the Plan, each Performance Unit in any Performance Award
Account of each Participant at December 31 of any year shall be credited, as of
such December 31 of each year in the Performance Period for such Performance
Unit, with an amount equal to the Annual Earnings Per Share (or Net Loss Per
Share) for such year; provided that, if in any year there shall be any
outstanding Net Loss Carryforward applicable to such Performance Unit, such Net
Loss Carryforward shall be applied to reduce any amount which would otherwise be
credited to or in respect of such Performance Unit pursuant to this Section 4.1
in such year until such Net Loss Carryforward has been fully so
applied.

     

    SECTION  4.2. (a)  Subject
to the provisions of the Plan, amounts credited to a Participant's Performance
Award Account in respect of Performance Units shall be paid to such Participant
as soon as practicable after, but not later than the March 15th after,
the Award Valuation Date with respect to such Performance Units.

     

    (b) Payments
pursuant to Section 4.2(a) shall be in cash.

     

    (c) Notwithstanding
any other provision of the Plan to the contrary, no Covered Officer shall be
entitled to any payment with respect to any Performance Units unless the members
of the Committee referred to in Section 3.4(b) hereof shall have certified
the


    
      
         


      

      
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    amount of
the Annual Earnings Per Share (or Net Loss Per Share) for each year or portion
thereof in the Performance Period applicable to such Performance
Units.

     

    SECTION  4.3. Anything
contained in the Plan to the contrary notwithstanding:

     

    (a) The
Committee may, in its sole discretion, suspend, permanently or for a specified
period of time or until further determination by the Committee, the making of
any part or all of the credits which would otherwise have  been made
to the Performance Award Accounts of all the Participants or to such Accounts of
one or more Participants as shall be designated by the Committee.

     

    (b) Each
Performance Unit and all other amounts credited to a Participant's Performance
Award Account in respect of such Performance Unit shall be forfeited in the
event of the Discharge for Cause of such Participant prior to the end of the
Performance Period applicable to such Performance Unit.

     

    (c) Each
Performance Unit and all other amounts credited to a Participant's Performance
Award Account in respect of such Performance Unit shall, unless and to the
extent that the Committee shall in its absolute discretion otherwise determine
with respect to Covered Officers or the Chairman of the Board, President or any
Senior Vice President of the Company shall in his absolute discretion determine
with respect to participants who were not Covered Officers immediately prior to
such Participant’s Termination of Employment, by reason of special mitigating
circumstances, be forfeited in the event that such Participant's Termination of
Employment shall occur for any reason other than death, Disability, retirement
under the Company's retirement plan, or retirement with the consent of the
Company outside the Company's retirement plan, at any time (except within two
years after the date on which a Change in Control shall have occurred) prior to
the end of the Performance Period applicable to such Performance
Unit.

     

    (d) If any
suspension is in effect pursuant to Section 4.3(a) on a date when a credit would
otherwise have been made pursuant to Section 4.1, the amount which would have
been credited but for such suspension shall be forfeited and no credits shall
thereafter be made in lieu thereof.  If the Committee shall so
determine in its sole discretion, the amounts theretofore credited to any
Performance Award Account or Accounts, other than any Performance Award Account
of a Covered Officer, shall accrue interest, during the suspension period, at a
rate equal to the prime commercial lending rate announced from time to time by
JPMorgan Chase Bank, N.A. (compounded quarterly) or at such other rate and in
such manner as shall be determined from time to time by the
Committee.

     

    ARTICLE
V

    GENERAL
INFORMATION

     

    SECTION  5.1. If Net
Income, Annual Earnings Per Share or Net Loss Per Share for any year shall have
been affected by special factors (including material acquisitions or
dispositions of property, or other unusual items) which in the Committee's
judgment should or should not be taken into account, in whole or in part, in the
equitable administration of the Plan, the Committee may, for any purpose of the
Plan, adjust Net Income, Annual Earnings Per Share


    
      
         


      

      
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    or Net
Loss Per Share, as the case may be, for such year (and subsequent years as
appropriate), or any combination of them, and make credits, payments and
reductions accordingly under the Plan; provided, however, the Committee shall
not have the authority to make any such adjustments to payments with respect to
the Performance Awards of, or credits to the Performance Award Accounts of, any
Participant who is at such time a Covered Officer if the effect of any such
action would be to increase the amount that would be credited to or paid from
such Performance Award Accounts.

     

    SECTION  5.2. The
Committee shall for purposes of Articles III and IV make appropriate adjustments
in the number of Performance Units which may be granted pursuant to Performance
Awards and in the number of Performance Units which shall have been credited to
Participants' accounts, in order to reflect any merger or consolidation to which
the Company is a party or any stock dividend, split-up, combination or
reclassification of the outstanding shares of Company Common Stock or any other
relevant change in the capitalization of the Company.

     

    SECTION  5.3. A
Participant may designate in writing a beneficiary (including the trustee or
trustees of a trust) who shall upon the death of such Participant be entitled to
receive all amounts which would have been payable hereunder to such
Participant.  A Participant may rescind or change any such designation
at any time.  Except as provided in this Section 5.3, none of the
amounts which may be payable under the Plan may be assigned or transferred
otherwise than by will or by the laws of descent and distribution.

     

    SECTION  5.4. All
payments made pursuant to the Plan shall be subject to withholding in respect of
income and other taxes required by law to be withheld, in accordance with
procedures to be established by the Committee.

     

    SECTION  5.5. The
selection of an individual for participation in the Plan shall not give such
Participant any right to be retained in the employ of the Company or any
Subsidiary, and the right of the Company or any such Subsidiary to dismiss or
discharge any such Participant, or to terminate any arrangement pursuant to
which any such Participant provides services to the Company, is specifically
reserved.  The benefits provided for Participants under the Plan shall
be in addition to, and shall in no way preclude, other forms of compensation to
or in respect of such Participants.

     

    SECTION  5.6. The Board
of Directors and the Committee shall be entitled to rely on the advice of
counsel and other experts, including the independent public accountants for the
Company.  No member of the Board of Directors or of the Committee or
any officers of the Company or any Subsidiary shall be liable for any act or
failure to act under the Plan, except in circumstances involving bad faith on
the part of such member or officer.

     

    SECTION  5.7. Nothing
contained in the Plan shall prevent the Company or any Subsidiary or affiliate
of the Company from adopting or continuing in effect other compensation
arrangements, which arrangements may be either generally applicable or
applicable only in specific cases.


    
      
         


      

      
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    ARTICLE
VI

    AMENDMENT
OR TERMINATION OF THE PLAN

     

    SECTION  6.1. The Board
of Directors may at any time terminate the Plan, in whole or in part, or from
time to time, subject to the stockholder approval requirements of Section
162(m), amend the Plan, provided that, except as otherwise provided in the Plan,
no such amendment or termination shall adversely affect the amounts credited to
the Performance Award Account of a Participant with respect to Performance
Awards previously made to such Participant.  Provided that the
requirements of Section 409A are satisfied, including the 12 month delay and 24
month completion requirements of Treasury Regulations Section
§1.409A-3(j)(4)(ix)(C), in the event of such termination, in whole or in part,
of the Plan, the Committee may in its sole discretion direct the payment to
Participants of any amounts specified in Article IV and not theretofore paid
out, prior to the respective dates upon which payments would otherwise be made
hereunder to such Participants, and in a lump sum or installments as the
Committee shall prescribe with respect to each such
Participant.  Notwithstanding the foregoing, any such payment to a
Covered Officer must be discounted to reflect the present value of such payment
using the prime lending rate announced from time to time by JPMorgan Chase Bank,
N.A. (compounded quarterly) or by another major national bank headquartered in
New York, New York and designated by the Committee.  The Board may at
any time and from time to time delegate to the Committee any or all of its
authority under this Article VI.

     

    ARTICLE
VII

    SECTION
409A

     

    SECTION  7.1. Notwithstanding
any other provision of this Plan, it is the intention of the Company that no
payment or entitlement pursuant to this Plan will give rise to any adverse tax
consequences to any Participant under Section 409A.  This Plan and any
amendments hereto shall be interpreted to that end and (1) to the maximum extent
permitted by law, no effect shall be given to any provision herein, any
amendment hereto or any action taken hereunder in a manner that reasonably could
be expected to give rise to adverse tax consequences under Section 409A and (2)
the Company shall take any corrective action reasonably within its control that
is necessary to avoid such adverse tax consequences.  No amendments
shall divest otherwise vested rights of Participants or their
beneficiaries.

     

    SECTION  7.2. If at any
time the Plan fails to meet the requirements of Section 409A, an amount equal to
the amount required to be included in the Participant's income as a result of
the failure to comply with the requirements of Section 409A shall be paid to the
Participant in one lump sum on the first day of the month following the
Company’s determination that the failure has occurred.

     

    SECTION  7.3. Notwithstanding
any other provision hereof, payments hereunder which constitute deferred
compensation under Section 409A and which are not exempt from coverage shall be
made, if the Participant is then a Specified Employee and payment is triggered
by the Participant's Termination of Employment, on the first day of the seventh
month following the date of the Specified Employee’s Termination of Employment,
or, if earlier, the date of death of the Specified Employee.  On the
first day of such seventh month or on the first day of the month following the
earlier death of the Specified Employee, the Specified Employee or
his


    
      
         


      

      
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    beneficiary
shall be paid in a lump sum the amount that the Specified Employee would have
been paid hereunder over the preceding six months (or, if earlier, the months
preceding the date of death) but for the fact that he was a Specified
Employee.  Nevertheless, for all other purposes of this Agreement, the
payment shall be deemed to have been made on the date it would have had the
Participant not been a Specified Employee.

     

    ARTICLE
VIII

    DEFINITIONS

     

    SECTION  8.1. For the
purposes of the Plan, the following terms shall have the meanings
indicated:

     

    (a) Annual
Earnings Per Share:  With respect to any year, the result obtained by
dividing (i) Net Income for such year by (ii) the average number of issued and
outstanding shares (excluding treasury shares and shares held by any
subsidiaries) of Common Stock, par value $.10 per share, of the Company during
such year as reviewed by the Company's independent auditors.

     

    (b) Award
Valuation Date:  December 31 of the year in which the third
anniversary of the grant of such Performance Award to a Participant shall occur
or, if earlier, December 31 of the year in which such Participant's Termination
of Employment shall occur, if such Termination of Employment occurs (i) within
two years after a Change in Control or (ii) as a result of death, Disability,
retirement under the Company's retirement plan or retirement with the consent of
the Company outside the Company's retirement plan.

     

    (c) Board of
Directors:  The Board of Directors of the Company.

     

    (d) Change in
Control:  A Change in Control shall be deemed to have occurred if
either (i) any person, or any two or more persons acting as a group, and all
affiliates of such person or persons, shall acquire beneficial ownership of more
than 20% of all classes and series of the Company's stock outstanding, taken as
a whole, that has voting rights with respect to the election of directors of the
Company (not including any series of preferred stock of the Company that has the
right to elect directors only upon the failure of the Company to pay dividends)
pursuant to a tender offer, exchange offer or series of purchases or other
acquisitions, or any combination of those transactions, or (ii) there shall be a
change in the composition of the Board of Directors of the Company at any time
within two years after any tender offer, exchange offer, merger, consolidation,
sale of assets or contested election, or any combination of those transactions
(a “Transaction”), so that (A) the persons who were directors of the Company
immediately before the first such Transaction cease to constitute a majority of
the Board of Directors of the corporation which shall thereafter be in control
of the companies that were parties to or otherwise involved in such first
Transaction, or (B) the number of persons who shall thereafter be directors of
such corporation shall be fewer than two-thirds of the number of directors of
the Company immediately prior to such first Transaction.  A Change in
Control shall be deemed to take place upon the first to occur of the events
specified in the foregoing clauses (i) and (ii).

     

    
      
         


      

      
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    (e) Committee:  The
Committee designated pursuant to Section 2.1.  Until otherwise
determined by the Board of Directors, the Corporate Personnel Committee
designated by such Board shall be the Committee under the Plan.

     

    (f) Company
Common Stock:  Common Stock, par value $0.10 per share, of the Company
and such other Company or subsidiary securities as may be designated from time
to time by the Committee.

     

    (g) Covered
Officer:  At any date, (i) any individual who, with respect to the
previous taxable year of the Company, was a “covered employee” of the Company
within the meaning of Section 162(m); provided, however, the term “Covered
Officer” shall not include any such individual who is designated by the
Committee, in its discretion, at the time of any grant or at any subsequent time
as reasonably expected not to be such a “covered employee” with respect to the
current taxable year of the Company and (ii) any individual who is designated by
the Committee, in its discretion, at the time of any grant or at any subsequent
time as reasonably expected to be such a “covered employee” with respect to the
current taxable year of the Company or with respect to the taxable year of the
Company in which payment from any Performance Award Account of such individual
will be made.

     

    (h) Disability:  In
the case of any Participant, disability which after the expiration of more than
26 weeks after its commencement is determined to be total and permanent by a
physician selected by the Company and acceptable to such Participant or his
legal representatives.

     

    (i) Discharge
for Cause:  Involuntary Termination of Employment as a result of
dishonesty or similar misconduct directly related to the performance of duties
for the Company or a Subsidiary.

     

    (j) Net
Income:  With respect to any year, the sum of

     

    (i) the net
income (or net loss) of the Company and its consolidated subsidiaries for such
year as reviewed by the Company's independent auditors and released by the
Company to the public; plus (or minus)

     

    (ii) the
minority interests' share in the net income (or net loss) of the Company's
consolidated subsidiaries for such year as reviewed by the Company's independent
auditors and released by the Company to the public; plus (or minus)

     

    (iii) the
effect of changes in accounting principles of the Company and its consolidated
subsidiaries for such year plus (or minus) the minority interests' share in such
changes in accounting principles,

     

    as
reviewed by the Company's independent auditors and released by the Company to
the public.

    


    (k) Net Loss
Carryforward:  With respect to any Performance Units, (i) an amount
equal to the Net Loss Per Share for any year in the applicable Performance
Period times the number of such Performance Units then outstanding, reduced by
(ii) any portion thereof which has been applied in any prior year as provided in
Section 4.1.

     

    
      
        
           


        

        
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    (l) Net Loss
Per Share:  The amount obtained when the calculation of Annual
Earnings Per Share results in a number that is less than zero.

     

    (m) Participant:  An
individual who has been selected by the Committee to receive a Performance Award
and in respect of whose Performance Award Account any amounts remain
payable.

     

    (n) Performance
Award:  The grant of Performance Units by the Committee to a
Participant pursuant to Section 3.1 or 3.4.

     

    (o) Performance
Award Account:  An account established for a Participant pursuant to
Section 3.2.

     

    (p) Performance
Period:  With respect to any Performance Unit, the period beginning on
January 1 of the year in which such Performance Unit was granted and ending on
the Award Valuation Date for such Performance Unit.

     

    (q) Performance
Unit:  A unit covered by Performance Awards granted or subject to
grant pursuant to Article III.

     

    (r) Section
162(m):  Section 162(m) of the Code and the rules promulgated
thereunder by the Internal Revenue Service.

     

    (s) Section
409A:  Section 409A of the Code and the Treasury Regulations and other
interpretive guidance issued thereunder.

     

    (t) Specified
Employee: A Participant who is a key employee of the Company under Treasury
Regulations §1.409A-1(i) because of final and binding action taken by the Board
of Directors of the Company or the Committee, or by operation of law or such
regulation.

     

    (u) Subsidiary:  (i)
Any corporation or other entity in which the Company possesses directly or
indirectly equity interests representing at least 50% of the total ordinary
voting power or at least 50% of the total value of all classes of equity
interests of such corporation or other entity and (ii) any other entity in which
the Company has a direct or indirect economic interest that is designated as a
Subsidiary by the Committee.

     

    SECTION  8.2. Termination
of Employment:  The cessation of the rendering of services, such that
a person would no longer be eligible to receive a Performance Award under
Section 3.1 hereof, or a termination of employment or termination of officer
position with the Company or a Subsidiary where the person continues to provide
services under Section 3.1 (c) or (d) hereof, provided such termination
qualifies as a “termination of employment” under the default rules of Treasury
Regulations §1.409A-1(h).

     

    
      
         


      

      
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