Document:

exv10w8

 

Exhibit 10.8

     FIRST AMENDMENT (the “Amendment”) to the various Restricted Stock Award Agreements
(the “RS Agreements”) by and between [                    ] (the “Executive”) and Phelps
Dodge Corporation, a New York corporation (the “Corporation”), dated as of July    , 2006.
Terms used without definition herein shall have the respective meanings set forth in the applicable
RS Agreement or the Corporation’s 2003 Stock Option and Restricted Stock Plan (the “Plan”).

     WHEREAS, the Corporation has granted awards of Restricted Stock to the Executive pursuant to
the Plan or a predecessor plan (as evidenced by the RS Agreements) for the purpose of incentivizing
the Executive to improve the performance of the Corporation and create value for its shareholders;

     WHEREAS, each share of Restricted Stock is governed by the terms of the applicable RS
Agreement and the Plan;

     WHEREAS, the Corporation has entered into a definitive agreement dated as of June 25, 2006
(the “Combination Agreement”) pursuant to which the Corporation will combine with Inco
Limited pursuant to a plan of arrangement under the laws of Canada (the “Transaction”);

     WHEREAS, the consummation of the Transaction will constitute a Change of Control for purposes
of the RS Agreement and the Plan; and

     WHEREAS, pursuant to and in accordance with Section 7 of the Plan, the Corporation and the
Executive have determined that, in light of and subject to the consummation of the Transaction, it
is in the mutual best interests of the Corporation, its shareholders and the Executive to amend the
RS Agreements to modify certain of the Executive’s rights and entitlements under the RS Agreements
and the Plan and to make the other changes set forth in this Amendment.

AMENDMENT

     NOW THEREFORE, in consideration of the premises and the mutual covenants and promises
contained herein and for other good and valuable consideration, the Corporation and the Executive
hereby agree as follows:

	1.	 	This Amendment shall be effective as of the Effective Time (as such term is defined in the
Combination Agreement). In the event that the Combination Agreement is terminated prior to
the occurrence of the Effective Time or if the Effective Time does not otherwise occur on or
prior to January 1, 2007, this Amendment shall be null and void ab initio and shall have no
force or effect.

The parties hereto acknowledge and agree that the Amendment shall apply solely with respect
to the Transaction and shall not apply with respect to any other transaction (including,
without limitation, any transaction that is consummated subsequent to the Transaction) that,
if consummated, would constitute a Change of Control for purposes of the RS Agreements and
the Plan.

 

 

	2.	 	Section 3 of each RS Agreement is hereby amended by deleting the following phrases as may be
applicable “(except for a termination occurring within 6 months of the Grant Date on account
of your Disability or Retirement),” “(except for a termination occurring within 6 months of
the Grant Date on account of your Disability),” and “(except for a termination that occurs
within 6 months of the Grant Date)”.

	3.	 	Section 4 of each RS Agreement is hereby deleted in its entirety and replaced by the
following new Section 4:

     “4. Change of Control. In the event your employment with the Corporation or any Subsidiary
terminates by reason of a Qualifying Termination (as defined below) within two years of a Change of
Control (as defined below) of the Corporation, any Restricted Period still in effect shall lapse.

     For purposes of this award:

     A “Change of Control” shall have the meaning set forth in the Plan.

     A “Qualifying Termination” means a termination of your employment with the Corporation or any
Subsidiary of the Corporation (under circumstances where you are no longer employed by the Company
or any Subsidiary) (i) by you for Good Reason (as defined below), (ii) by the Corporation or a
Subsidiary without Cause )(as defined below) and (iii) prior to your death, Disability or
Retirement.

          a. Cause. For purposes of the definition of Qualifying Termination, “Cause” shall mean
willful misconduct in the performance of your duties which results in a material detriment to the
Corporation, and is subsidiaries, taken as a whole.

     b. Good Reason. For purposes of the definition of Qualifying Termination, “Good
Reason” means a termination by you of your employment with the Corporation and its
Subsidiaries on account of one or more of the following events (and you have not agreed to
such event in writing):

     (i) a material reduction in the duties and responsibilities held by you
immediately prior to such Change of Control;

     (ii) a reduction by the Corporation or any Subsidiary of your base salary or
target bonus opportunity under the Corporation’s Annual Incentive Compensation Plan
(or any successor plan thereto) as in effect immediately prior to such Change of
Control;

     (iii) a material reduction in the aggregate level of benefits from those
provided to you immediately prior to the Change of Control under the Corporation’s
employee benefit plans and programs, not taking into account any reduction that is
generally applicable to all employees eligible to participate in any such plan or
program; or

2

 

     (iv) the Corporation’s or any Subsidiary’s requiring you to be based anywhere
other than a location within 50 miles of his or her location immediately prior to
such Change of Control.”

	4.	 	The remaining provisions of each RS Agreement shall remain in full force and effect.

	5.	 	Confidentiality. The Executive hereby agrees that he or she will not disclose to any person
or entity (other than to his or her personal legal advisor on a need-to-know basis), the
nature and content of any negotiations, discussions, presentations or other communications
with respect to this Amendment or, prior to the public disclosure of this Amendment by the
Corporation, the existence or the terms and conditions of this Amendment.

	6.	 	Governing Law. This Amendment shall be governed by the laws of the State of New York.

          IN WITNESS WHEREOF, the Corporation has duly executed this Amendment by its authorized
representative and the Executive has hereunto set [his] [her] hand, in each case as of the date of
this Amendment.

	 	 	 	 	 	 	 
	 	 	PHELPS DODGE CORPORATION
	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	By:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE:
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

3EXIBIT 10.1

                       RELOCATION AND RETENTION AGREEMENT
                       ----------------------------------

         This Relocation and Retention Agreement is entered into as of this 24th
day of July, 2006 by and between Escalade, Incorporated, an Indiana corporation
("Escalade") and Terry D. Frandsen, an individual resident in Indiana
("Executive").

         WHEREAS, Escalade desires that Executive's services as its Chief
Financial Officer be primarily rendered from Escalade's offices in Evansville,
Indiana; and

         WHEREAS, Executive currently resides in the Wabash, Indiana area and
prior to the date hereof has been working primarily from Escalade's offices in
Wabash, Indiana; and

         WHEREAS, both Escalade and Executive mutually desire that Executive
relocate to Evansville, Indiana as promptly as is practicable and recognize that
Executive will incur significant expenses in relocating his family and personal
residence to Evansville, Indiana;

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, Escalade and Executive agree as follows:

         1.    Purchase and Sale of Existing Residence.   Escalade and Executive
agree that Escalade will purchase Executive's existing residence located at 3885
West 630 North, Huntington, Indiana 46750 ("Existing Residence") for a purchase
price equal to $375,000 ("Purchase Price"), such purchase to be on normal and
customary terms and conditions currently prevailing in the county in which the
Existing Residence is based for residential real estate transactions between
unrelated parties. Escalade and Executive agree that the Purchase Price has been
determined based upon a fair market appraisal of the Existing Residence prepared
by Capozza Real Estate Appraisals and dated as of June 6, 2006. The closing of
the purchase and sale of the Existing Residence ("Closing") shall occur no later
than August 15, 2006, subject to the satisfaction of standard closing
conditions.

         2.    Reimbursement of Loss.   Escalade and Executive agree that
Executive's basis in the Existing Residence is $411,000, which basis exceeds the
Purchase Price by $36,000. Escalade hereby agrees to pay to Executive at the
Closing a cash bonus in the amount of $36,000 so that Executive will not incur a
financial loss on the sale of the Existing Residence as a result of his
relocation to Evansville, Indiana, plus a cash bonus in the amount of $5,000 to
cover Executive's closing costs, including but not limited to real estate sales
commissions, typically paid by a purchaser that are incurred by Executive in
connection with Executive's purchase of a new residence in the Evansville,
Indiana area (collectively, both such cash bonuses constitute the "Relocation
Bonus" in the aggregate amount of $41,000). Escalade and Executive agree that
some or all of the Relocation Bonus will constitute compensation to Executive
taxable as ordinary income. Accordingly, to prevent further out of pocket loss
to Executive in connection with the relocation, Escalade agrees that it will
make an additional cash bonus payment at Closing to Executive in the amount of
$29,000 to cover the estimated additional tax payment required of Executive
("Gross Up Bonus"). Escalade shall withhold income tax, social security tax and
other applicable taxes relating to the Relocation Bonus and Gross Up Bonus.

         3.    Real Estate Broker.   Escalade acknowledges that Executive has
previously listed his Existing Residence for sale with Coldwell Banker ("Real
Estate Broker") and that Real Estate Broker has waived its rights to any
commission in connection with Executive's sale of the Existing Residence to
Escalade provided that Escalade engages Real Estate Broker in connection with
Escalade's contemplated resale of the Existing Residence. Escalade agrees that
it will engage Real Estate Broker on the same terms and conditions as currently
exist between Executive and Real Estate Broker.

         4.    Moving Expenses.  Escalade agrees that it will pay the reasonable
moving expenses ("Moving Expenses") incurred by Executive in packing, loading,
transporting, unloading and unpacking the household furnishings and all personal
effects desired to be moved by Executive from his Existing Residence to his new
residence in Evansville, Indiana. Escalade and Executive agree that the moving
company shall invoice Escalade directly for its services and that Escalade shall
pay such invoice directly to the moving company.

                                       4
<PAGE>

         5.    Maximum Escalade Relocation Payments.   Escalade and Executive
agree that the anticipated maximum net out-of-pocket costs to Escalade in
connection with Executive's relocation to Evansville will not exceed $120,000,
which amount includes the Relocation Bonus, Gross Up Bonus, Moving Expenses, all
closing costs (including real estate sales commissions) incurred by Escalade in
connection with its purchase and sale of the Existing Residence, and any
shortfall between the amount Escalade receives upon its resale of the Existing
Residence and the Purchase Price (collectively, the "Relocation Payments"). In
the event that the Relocation Payments would exceed $120,000, Executive agrees
that Escalade shall reduce his annual bonus compensation for fiscal year 2006 by
the amount of such Relocation Payments in excess of $120,000. If the amount of
Executive's annual bonus compensation for fiscal year 2006 is not sufficient to
offset the amount of excess, then the excess shall be applied against future
years' bonus compensation until the excess has been paid in full.

         6.    Effect of Termination of Employment. In the event that, following
Executive's relocation, Executive's employment with Escalade would be terminated
with just cause by Escalade or by Executive without good reason (a
"Termination"), Executive agrees that he may be required to reimburse Escalade
for the Relocation Payments as follows. Executive shall reimburse Escalade for
100% of such Relocation Payments (less any amount previously repaid pursuant to
Section 5) if Termination occurs on or prior to the first anniversary of the
date of this Agreement; 66 2/3% if Termination occurs after the first
anniversary and on or prior to the second anniversary of the date of this
Agreement; and 33 1/3% if Termination occurs after the second anniversary and on
or prior to the third anniversary of the date of this Agreement.

         For purposes of this Agreement, termination by Escalade "with just
cause" shall mean any termination by Escalade due to the commission by Executive
of fraud with respect to Escalade, the indictment of Executive for the
commission of a felony, or the intentional disregard by Executive of the express
instructions of Escalade's Board of Directors or Chief Executive Officer with
respect to a matter of policy, which disregard continues for not less than 15
days following Executive's receipt of written notice of such disregard; and
termination by Executive "without good reason" shall mean any termination by
Executive other than by reason of his death or disability, Escalade requiring
Executive to relocate anywhere in excess of 50 miles from Escalade's corporate
offices in Evansville, Indiana, or Escalade imposing job authorities or
responsibilities upon Executive which are materially inconsistent with his
experienced, knowledge, skill and background.

         7.    No Guarantee of Employment.  Nothing herein shall be construed as
creating a contract or guarantee of employment for any specific duration of time
and Executive's employment shall continue to be on an at-will basis and may be
terminated by Escalade at any time with or without cause.

         8.    Successors; Binding Agreement.   This Agreement shall be binding
upon Escalade and Executive, and their respective successors, heirs and assigns.

         9.    Severability.   If any provision, construction, or application of
this Agreement is held to be unenforceable for any reason, the validity of all
remaining provisions, constructions, and applications shall not be affected, and
the rights and obligations of the parties shall be construed and enforced as if
the Agreement did not contain such unenforceable provision, construction, or
application; provided, however, that the resulting construction and enforcement
shall be generally consistent with the intended purposes of the entire
Agreement.

         10.   Assignment.   Neither Escalade nor Executive may assign, transfer
or in any other way alienate the benefits and obligations provided and created
by this Agreement.

         11.   Governing Law.   This Agreement and all actions taken hereunder
shall be governed as to validity, construction, interpretation and
administration by the laws of the State of Indiana and applicable federal law,
without regard to the choice of law provisions thereof.

         12.   Entire Agreement.   No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.

                                       5
<PAGE>

         IN WITNESS WHEREOF, this Relocation and Retention Agreement has been
executed by the parties hereto as of the day and year first above written.

                                          ESCALADE, INCORPORATED

                                          By: /s/ DANIEL MESSMER
                                              ----------------------------------
                                          Title:  Chief Operating Officer

                                          EXECUTIVE

                                          /s/ TERRY D. FRANDSEN
                                          --------------------------------------
                                          Terry D. Frandsen

                                       6

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