Document:

exhibit 10.2

Exhibit 10.2

McMoRan
EXPLORATION CO.

NOTICE
OF GRANT OF

NONQUALIFIED
STOCK OPTIONS

UNDER
THE 2005 STOCK INCENTIVE PLAN

1.  (a)            
Pursuant
to the McMoRan Exploration Co. 2005 Stock Incentive Plan (the “Plan”),
_______________ (the “Optionee”) is hereby granted effective ____________, ____,
in consideration of future services, Options to purchase from the Company, on
the terms and conditions set forth in this Notice and in the Plan, __________
shares of Common Stock of the Company at a purchase price of $________ per
share.

 

(b)  Defined
terms not otherwise defined in Section 11 of this Notice shall have the meanings
set forth in Section 2 of the Plan.

 

(c)  The
Options granted hereunder are intended to constitute nonqualified stock options
and are not intended to constitute incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).

 

2.   (a)       
All
Options granted hereunder shall terminate on ___________, 20____ unless
terminated earlier as provided in Section 4 of this Notice.

 

(b)  The
Options granted hereunder shall become exercisable in installments as
follows:

 

Date
Exercisable  Number
of Shares

(c)  Options
granted hereunder may be exercised with respect to all or any part of the Shares
comprising each installment as the Optionee may elect at any time after such
Options become exercisable until the termination date set forth in Section 2(a)
or Section 4, as the case may be.

 

(d)  Notwithstanding
the foregoing provisions of this Section 2, the Options granted hereunder shall
immediately become exercisable in their entirety at such time as there shall be
a Change in Control of the Company.

 

3.  Upon each
exercise of the Options granted hereunder, the Optionee shall give written
notice to the Company, which shall specify the number of Shares to be purchased
and shall be accompanied by payment in full of the aggregate purchase price
thereof (which payment may be made in Shares owned by the Optionee for at
least six months), in accordance with procedures established by the Committee.
Such exercise shall be effective upon receipt by the Company of such notice in
good order and payment. 

 

4.   (a)       
Except as
set forth in this Section 4, the Options provided for in this Notice shall
immediately terminate on the date that the Optionee ceases for any reason to be
an Eligible Individual.

 

(b)  If the
Optionee ceases to be an Eligible Individual for any reason other than death,
Disability, Retirement or termination for Cause, any Option granted hereunder
that is then exercisable shall remain exercisable in accordance with the terms
of this Notice within three months after the date of such cessation, but in no
event shall any such Option be exercisable after the termination date specified
in Section 2(a). 

 

(c)  If the
Optionee ceases to be an Eligible Individual by reason of the Optionee’s
Disability or Retirement, any Option granted hereunder that is exercisable on
the date of such cessation, as well as any Option granted hereunder that would
have become exercisable within one year after the date of such cessation had the
Optionee continued to be an Eligible Individual, shall remain exercisable in
accordance with the terms of this Notice within three years after the date of
such cessation, but in no event shall any such Option be exercisable after the
termination date specified in Section 2(a).

 

(d)   (i)     
If the
Optionee ceases to be an Eligible Individual as a result of the Optionee’s
death, any Option granted hereunder that is exercisable on the date of such
death, as well as any Option granted hereunder that would have become
exercisable within one year after the date of such death had the Optionee
continued to be an Eligible Individual, shall remain exercisable by the
Optionee’s Designated Beneficiary in accordance with the terms of this Notice
until the third anniversary of the date
of such death, but in no event shall any such Option be exercisable after the
termination date specified in Section 2(a).

 

(ii)  If the
Optionee dies after having ceased to be an Eligible Individual and any Option
granted hereunder is then exercisable in accordance with the provisions of this
Section 4, such Option will remain exercisable by the Optionee’s Designated
Beneficiary in accordance with the terms of this Notice until the third
anniversary of the date the Optionee ceased to be an Eligible Individual, but in
no event shall any such Option be exercisable after the termination date
specified in Section 2(a).

 

(e)  If the
Optionee ceases to be an Eligible Individual by reason of the Optionee’s
termination for Cause, any Option granted hereunder that is exercisable on the
date of such cessation shall terminate immediately.

 

5.  The
Options granted hereunder are not transferable by the Optionee otherwise than by
will or by the laws of descent and distribution or pursuant to a domestic
relations order, as defined in the Code, and shall be exercised during the
lifetime of the Optionee only by the Optionee or by the Optionee’s duly
appointed legal representative.

 

6.  All
notices hereunder shall be in writing and, if to the Company, shall be delivered
personally to the Secretary of the Company or mailed to its principal office,
1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the attention of
the Secretary; and, if to the Optionee, shall be delivered personally, mailed or
delivered via e-mail to the Optionee at the address on file with the Company.
Such addresses may be changed at any time by notice from one party to the
other.

 

7.  The terms
of this Notice shall bind and inure to the benefit of the Optionee, the Company
and the successors and assigns of the Company and, to the extent provided in the
Plan and in this Notice, the Designated Beneficiaries and the legal
representatives of the Optionee.

 

8.  This
Notice is subject to the provisions of the Plan. The Plan may at any time be
amended by the Board, except that any such amendment of the Plan that would
materially impair the rights of the Optionee hereunder may not be made without
the Optionee’s consent. The Committee may amend, modify or terminate this Notice
and any of the Options granted hereunder at any time prior to exercise in any
manner not inconsistent with the terms of the Plan, including, without
limitation, to change the date or dates as of which the Options granted
hereunder become exercisable. Notwithstanding the foregoing, no such amendment,
modification or termination may materially impair the rights of the Optionee
hereunder without the Optionee’s consent. Except as set forth above, any
applicable determinations, orders, resolutions or other actions of the Committee
shall be final, conclusive and binding on the Company and the
Optionee.

 

9.  The
Optionee is required to satisfy any obligation in respect of withholding or
other payroll taxes resulting from the exercise of any Option granted hereunder,
in accordance with procedures established by the Committee, as a condition to
receiving any certificates for securities resulting from the exercise of any
such Option.

 

10.  Nothing
in this Notice shall confer upon the Optionee any right to continue in the
employ of the Company or any of its Subsidiaries or to interfere in any way with
the right of the Company or any of its Subsidiaries to terminate the Optionee’s
employment relationship with the Company or any of its Subsidiaries at any
time.

 

11.  As used
in this Notice, the following terms shall have the meanings set forth
below.

 

(a)  “Cause”
shall mean any of the following: (i) the commission by the Optionee of an
illegal act (other than traffic violations or misdemeanors punishable solely by
the payment of a fine), (ii) the engagement of the Optionee in dishonest or
unethical conduct, as determined by the Committee or its designee, (iii) the
commission by the Optionee of any fraud, theft, embezzlement, or
misappropriation of funds, (iv) the failure of the Optionee to carry out a
directive of his superior, employer or principal, or (v) the breach of the
Optionee of the terms of his engagement.

 

(b)  “Change
in Control” shall mean the earliest of the following events: (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 25% of all classes and
series of the Company’s outstanding stock (exclusive of stock held in the
Company’s treasury or by the Company’s Subsidiaries), 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, purchase or other acquisition or series of
purchases or other acquisitions, or any combination of those transactions (a
“25% Stock Acquisition”); provided, however, that any 25% Stock Acquisition
shall not constitute a Change in Control if all of the acquiring persons enter
into a standstill agreement with the Company in a form approved by the Board and
a majority of the members of the Board at the time of such approval were also
members of the Board immediately prior to the 25% Stock Acquisition, or (ii)
there shall be a change in the composition of the Board 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”), such 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 that shall thereafter be in control of
the companies that were parties to or otherwise involved in such 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.

 

(c)  “Disability”
shall mean long-term disability, as defined in the Company’s long-term
disability plan.

 

(d)  “Retirement”
shall mean early, normal or deferred retirement of the Optionee under a tax
qualified retirement plan of the Company or any other cessation of the provision
of services to the Company or a Subsidiary by the Optionee that is deemed by the
Committee to constitute a retirement.

 

McMoRan
EXPLORATION CO.

By:_____________________exhibit 10.3

Exhibit 10.3

McMoRan
EXPLORATION CO.

RESTRICTED
STOCK UNIT AGREEMENT

UNDER
THE 2005 STOCK INCENTIVE PLAN

AGREEMENT
dated as of ______________, 20__ (the “Grant Date”), between McMoRan Exploration
Co., a Delaware corporation (the “Company”), and ______________ (the
“Participant”).

 

1.   (a)       
Pursuant
to the McMoRan Exploration Co. 2005 Stock Incentive Plan (the “Plan”), the
Participant is hereby granted effective the Grant Date ___________ restricted
stock units (“Restricted Stock Units” or “RSUs”) on the terms and conditions set
forth in this Agreement and in the Plan.

 

(b)  Defined
terms not otherwise defined herein shall have the meanings set forth in Section
2 of the Plan.

 

(c)  Subject
to the terms, conditions, and restrictions set forth in the Plan and herein,
each RSU granted hereunder represents the right to receive from the Company, on
the respective scheduled vesting date for such RSU set forth in Section 2(a) of
this Agreement or on such earlier date as provided in Section 2(b) of this
Agreement or Section 6(b) of this Agreement (the “Vesting Date”), one share (a
“Share”) of common stock of the Company (“Common Stock”), free of any
restrictions, all amounts notionally credited to the Participant’s Dividend
Equivalent Account (as defined in Section 4 of this Agreement) with respect to
such RSU, and all securities and property comprising all Property Distributions
(as defined in Section 4 of this Agreement) deposited in such Dividend
Equivalent Account with respect to such RSU.

 

(d)  As soon
as practicable after the Vesting Date (but no later than 2 1⁄2 months from such
date) for any RSUs granted hereunder, the Participant shall receive from the
Company the number of Shares to which the vested RSUs relate, free of any
restrictions, a cash payment for all amounts notionally credited to the
Participant’s Dividend Equivalent Account with respect to such vested RSUs
(unless the receipt of such Shares and amounts has been deferred by the
Participant pursuant to the provisions of Section 5(a) of this Agreement), and
all securities and property comprising all Property Distributions deposited in
such Dividend Equivalent Account with respect to such vested RSUs.

 

2.   (a)     
The RSUs
granted hereunder are in consideration of the services to be performed by the
Participant during the service periods indicated below and shall vest in
installments as follows:

 

Scheduled
Vesting Date    Service
Period    Number
of RSUs

(b)  Notwithstanding
Section 2(a) of this Agreement, at such time as there shall be a Change in
Control of the Company, all unvested RSUs shall be accelerated and shall
immediately vest.

 

(c)  Until the
respective Vesting Date for an RSU granted hereunder, such RSU, all amounts
notionally credited in any Dividend Equivalent Account related to such RSU, and
all securities or property comprising all Property Distributions deposited in
such Dividend Equivalent Account related to such RSU shall be subject to
forfeiture as provided in Section 6 of this Agreement.

 

3.  Except as
provided in Section 4 of this Agreement, an RSU shall not entitle the
Participant to any incidents of ownership (including, without limitation,
dividend and voting rights) in any Share until the RSU shall vest and the
Participant shall be issued the Share to which such RSU relates nor in any
securities or property comprising any Property Distribution deposited in a
Dividend Equivalent Account related to such RSU until such RSU
vests.

 

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 (i) the amount of any cash dividends and (ii) the amount equal to
the Fair Market Value of any Shares, Subsidiary securities, other 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 hereunder 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 provisions of this Agreement. The “Account
Rate” shall be the prime commercial lending rate announced from time to time by
The Chase Manhattan Bank, N.A. 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.

 

5.   (a)        
Notwithstanding
the provisions of Section 1(d) of this Agreement, if, prior to December
31st of the
year prior to the beginning of the Service Period applicable to any RSUs, the
Participant shall so elect in accordance with procedures and subject to any
limitations established by the Committee, 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 at such time. The deferral is
subject to the following limitations:

 

(i)  If the
Participant is a Key Employee, a distribution of deferred amounts triggered by
the Participant’s separation from service (as that term is defined pursuant to
Section 409A of the Code) may not occur or begin until six months after the date
(the “Termination Date”) the Participant ceases to be an Eligible Individual
(the “Termination”).

 

(ii)  The
deferral period with respect to any Participant shall end
no later than six months after the Termination Date if the Participant’s
Termination is for any reason other than the Participant’s Disability or
Retirement.

 

(iii)  The
deferral period with respect to any Participant shall end three years after the
Termination Date if the Participant’s Termination occurs by reason of the
Participant’s Disability or Retirement. 

 

(iv)  In the
event of any Termination, a distribution of all amounts remaining unpaid shall
be made in full to the Participant or his or her designated beneficiary as soon
as administratively possible following the date of the end of the deferral
period as set forth in Sections 5(a)(ii) and (iii). 

 

(v)  All
securities or property comprising Property Distributions deposited in such
Dividend Equivalent Account related to such RSUs shall be distributed to the
Participant as soon as practicable after the Vesting Date for such RSUs,
irrespective of a deferral election made pursuant to this Section
5.

 

(vi)  The
deferral procedures described in this Section 5 are intended to comply with the
requirements of Section 409A of the Code and any related implementing
regulations or guidance. 

 

(b)  The
provisions of Section 4 shall continue to apply to all such vested RSUs and all
such credited amounts subject to a deferral election until paid in accordance
with the provisions of this Agreement.

 

6.   (a)       
Except as
set forth in Section 6(b) of this Agreement, all unvested RSUs provided for in
this Agreement, 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 Participant’s
Termination Date. In the event of a sale by the Company of its equity interest
in a Subsidiary following which such entity is no longer a Subsidiary of the
Company, persons who continue to be employed by such entity following such sale
shall cease to be Eligible Individuals for purposes of the Plan and this
Agreement.

 

(b)  Notwithstanding
the foregoing, if the Participant ceases to be an Eligible Individual by reason
of the Participant’s death, Disability, or Retirement, all the unvested RSUs
granted hereunder, 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 vest as of the Participant’s Termination Date. In the
event that the Participant ceases to be an Eligible Individual by reason of the
Participant’s Termination by his employer or principal without Cause, the
Committee or any person to whom the Committee has delegated authority may, in
its or his sole discretion, determine that all or any portion of the unvested
RSUs granted hereunder, 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 vest as of the Participant’s Termination Date.
In the event vesting is accelerated pursuant to this Section 6(b) and the
Participant is a Key Employee, a distribution of Shares issuable to the
Participant, all amounts notionally credited to the Participant’s Dividend
Equivalent Account, and all securities and property comprising all Property
Distributions deposited in such Dividend Equivalent Account due the Participant
upon the vesting of the RSUs shall not occur until six months after the
Termination Date, unless the Participant’s Termination is due to death or
Disability.

 

7.  The RSUs
granted hereunder, any amounts notionally credited in the Participant’s Dividend
Equivalent Accounts, and any securities and property comprising Property
Distributions deposited in such Dividend Equivalent Accounts are not
transferable by the Participant otherwise than by will or by the laws of descent
and distribution or pursuant to a domestic relations order, as defined in the
Code.

 

8.  All
notices hereunder shall be in writing and, if to the Company, shall be delivered
personally to the Secretary of the Company or mailed to its principal office,
1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the attention of
the Secretary; and, if to the Participant, shall be delivered personally or
mailed to the Participant at the address on file with the Company. Such
addresses may be changed at any time by notice from one party to the
other.

 

9.  This
Agreement is subject to the provisions of the Plan. The Plan may at any time be
amended by the Board, except that any such amendment of the Plan that would
materially impair the rights of the Participant hereunder may not be made
without the Participant’s consent. The Committee may amend this Agreement at any
time in any manner that is not inconsistent with the terms of the Plan and that
will not result in the application of Section 409A(a)(1) of the Code.
Notwithstanding the foregoing, no such amendment may materially impair the
rights of the Participant hereunder without the Participant’s consent. Except as
set forth above, any applicable determinations, orders, resolutions or other
actions of the Committee shall be final, conclusive and binding on the Company
and the Participant.

 

10.  The
Participant is required to satisfy any obligation in respect of withholding or
other payroll taxes resulting from the vesting of any RSU granted hereunder or
the payment of any securities, cash, or property hereunder, in accordance with
procedures established by the Committee, as a condition to receiving any
securities, cash payments, or property resulting from the vesting of any RSU or
otherwise.

 

11.  Nothing
in this Agreement shall confer upon the Participant any right to continue in the
employ of the Company or any of its Subsidiaries, or to interfere in any way
with the right of the Company or any of its Subsidiaries to terminate the
Participant’s employment relationship with the Company or any of its
Subsidiaries at any time.

 

12.  As used
in this Agreement, the following terms shall have the meanings set forth
below.

 

(a)  “Cause”
shall mean any of the following: (i) the commission by the Participant of an
illegal act (other than traffic violations or misdemeanors punishable solely by
the payment of a fine), (ii) the engagement of the Participant in dishonest or
unethical conduct, as determined by the Committee or its designee, (iii) the
commission by the Participant of any fraud, theft, embezzlement, or
misappropriation of funds, (iv) the failure of the Participant to carry out a
directive of his superior, employer or principal, or (v) the breach of the
Participant of the terms of his engagement.

 

(b)  “Change
in Control” shall mean 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 as provided under Section 409A of the Code,
as amended from time to time, and any related implementing regulations or
guidance.

 

(c)  “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.

 

(d)  “Fair
Market Value” shall, with respect to a share of Common Stock, a Subsidiary
security, or any other security, have the meaning set forth in the McMoRan
Exploration Co. 2005 Stock Incentive Plan Policies of the Committee, and, with
respect to any other property, mean the value thereof determined by the board of
directors of the Company in connection with declaring the dividend or
distribution thereof.

 

(e)  “Key
Employee” shall mean any employee who meets the definition of “key employee” as
defined in Section 416(i) of the Code.

 

(f)  Retirement”
shall mean early, normal or deferred retirement of the Participant under a tax
qualified retirement plan of the Company or any other cessation of the provision
of services to the Company or a Subsidiary by the Participant that is deemed by
the Committee or its designee to constitute a retirement.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day,
month, and year first above written. 

McMoRan
EXPLORATION CO.

By:____________________

 

 

 

____________________

(Participant)

 

____________________

(Street
Address)

 

____________________

(City)
(State) (Zip Code)

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