Document:

ex10-56.htm

    
      
        

      
Exhibit 10.56

    

      AGREEMENT
FOR CONSULTING SERVICES

      

      This
Agreement for Consulting Services (this “Agreement”) is
entered into as of January 11, 2008 between FM Services Company (“FMS”), and Dr. J.
Taylor Wharton (“Consultant”).

      

      WITNESSETH:

      

      WHEREAS
Consultant desires to render consulting services to FMS and its affiliates
(collectively, the “Affiliates”) and FMS
desires to retain Consultant to render such services, all on the terms and
conditions hereinafter provided.

      

      NOW,
THEREFORE, FMS and Consultant agree as follows:

      

      
        
          	
                  1. 

                	
                  Services.  During
      the term of this Agreement, Consultant will be responsible for consulting
      on all medical and health affairs affecting FMS, its Affiliates and their
      respective officers, directors, and employees, focusing on sites in the
      United States (the “Services”), as
      requested by Executive Officers of FMS or its
  Affiliates.

                

        

      

       

         
Consultant shall provide a monthly report to FMS setting forth in reasonable
detail time spent by Consultant in performance of the Services and the nature of
the Services involved.

      

      
        
          	
                  2. 

                	
                  Third Party
      Services.  Consultant may provide and be paid to provide
      services similar to the Services to third parties; provided, however,
      Consultant shall not engage in any business or activity detrimental to the
      business and interests of FMS or any of its Affiliates during the term of
      this Agreement.

                

        

      

      

      
        
          	
                  3. 

                	
                  Independent
      Contractor.  Consultant shall perform the Services as an
      independent contractor and Consultant shall not be deemed to be an
      employee or agent of FMS or any of its Affiliates. This Agreement shall
      not be deemed to create a partnership or joint venture between Consultant
      and FMS.

                

        

      

      

      
        
          	
                  4. 

                	
                  No Agency
      Authority.  Except as and to the extent that FMS may
      otherwise prescribe in writing, Consultant shall not have any authority to
      negotiate or conclude any contracts or to do anything which would
      otherwise result in the creation of a binding obligation on FMS or its
      Affiliates and Consultant shall not make any statement or representation
      to any third party concerning Consultant’s authority which is contrary to
      this provision.

                

        

      

      

      
        
          	
                  5. 

                	
                  Compensation.  For
      the satisfactory performance of all Services and undertakings
      hereunder:

                

        

      

      

      
        	
                i.  

              	
                FMS
      shall pay Consultant $400,000 per year, paid at a monthly rate of
      $33,333.33 on the first business day of each calendar
    month.

              

      

      

      
        	
                ii.  

              	
                FMS
      shall reimburse Consultant for all reasonable and customary out-of-pocket
      expenses incurred by Consultant in connection with the performance of the
      

              

      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        	       
      Services and that comply with FMS’ expense reimbursement
      policies.  Expense reports must be submitted by Consultant to
      FMS for approval.

      

       

      
        
          	
                  6. 

                	
                  Invoices and
      Payment. Consultant shall issue an invoice for reimbursable
      expenses to FMS by the fifteenth (15th)
      of each month for any amount which FMS is required to reimburse to
      Consultant pursuant to Article 5(ii)
above.

                

        

      

       

          Reimbursable
expenses shall be itemized and substantiated with such supporting documentation
as FMS may reasonably require.

      
         

            Provided
that FMS has received Consultant’s invoice and supporting documentation by the
fifteenth (15th) of the
month, FMS shall make payment of the amount invoiced, or so  

           
much of the amount invoiced as is not in dispute, on the first business day of
the following month.

   
Any amount invoiced that is in dispute shall be withheld pending resolution of
such dispute by mutual agreement of FMS and Consultant.

      

      
        
          
            	
                    7. 

                  	
                    Tax
      Matters.  Consultant shall be solely responsible for all
      United States or other taxes that may be applicable as a result of amounts
      payable to Consultant pursuant to this
  Agreement.

                  

          

        

      

      

      
        
          	
                  8. 

                	
                  Term and
      Termination.  This Agreement shall commence January 11,
      2008 (the “Effective
      Date”) and, unless earlier terminated, shall continue through
      December 31, 2008 (the “Primary Term”),
      and shall be automatically renewed thereafter, on the same terms and
      conditions, for successive one (1) year terms (each a “Renewal
      Term”).  Either of FMS or Consultant may, however,
      terminate this Agreement during the Primary Term or any Renewal Term
      without cause or penalty at any time by delivery of a written notice of
      termination thirty (30) or more days prior to the desired termination
      date.  All references to the “term” of this Agreement shall
      include both the Primary Term and any Renewal
  Terms.

                

        

      

      

      
        	
                 
      

              	
                This
      Agreement shall automatically terminate if Consultant is no longer
      available for any reason to provide the Services contemplated by this
      Agreement.

              

      

      

      
        	
                 
      

              	
                The
      termination of this Agreement shall not affect any previously accrued
      obligations of FMS set forth in Article 5 above (although the fees payable
      under Article 5(i) shall be prorated through the termination date) or of
      Consultant set forth in Articles 7 and 9 (which shall continue in full
      force and effect for the maximum period allowed by
  law).

              

      

      

      
        
          	
                  9. 

                	
                  Confidentiality.  Consultant
      shall hold in a fiduciary capacity for the benefit of FMS and its
      Affiliates all non-public information, knowledge or data relating to FMS,
      its Affiliates or any of their employees or agents which shall have been
      obtained by Consultant during or before the term of this Agreement
      (collectively, the “Confidential
      Information”). Confidential Information includes, without
      limitation: business plans, environmental reports, supply lists, price
      lists, non-public financial reports, personnel data, budget
    

                

        

      

      

      
      

      
        2

        
          

        

      

      

        
          
            	
                      

                  	
                    projections
      and all medical or health related reports, data, lists, plans, studies or
      other information. The term “Confidential Information” shall exclude any
      information which is publicly available from newspapers, television,
      radio, computer data bases, journals, and other sources of widely
      circulated information (unless such information has become publicly
      available due to Consultant’s breach of his obligations under this
      Agreement). Consultant shall not, without the prior written consent of
      FMS, at any time, whether during or after the term of this Agreement,
      communicate or divulge any such Confidential Information to anyone other
      than FMS and its Affiliates and/or persons designated by FMS. All records,
      files, drawings, documents, notes, programs, equipment and the like
      relating to the business or activities of FMS or its Affiliates which
      Consultant shall prepare or use or come into contact with shall be and
      remain the sole property of FMS or its Affiliates, as the case may be. If
      Consultant is required to divulge any Confidential Information by a court
      order or other governmental directive, Consultant shall first inform FMS
      of the court order or governmental directive in sufficient time to permit
      FMS to contest such court order or governmental directive or to seek
      protective orders concerning the handling of such Confidential
      Information. Consultant agrees that FMS and its Affiliates will suffer
      irreparable harm which cannot be adequately compensated by monetary
      damages if Consultant breaches the confidentiality provisions in this
      Article and Consultant therefore agrees that FMS and its Affiliates shall
      be entitled to injunctive relief in the event of a threatened breach of
      the confidentiality provisions of this Article by Consultant without the
      necessity of posting a bond or other security (unless otherwise required
      by non-waivable applicable
law).

                  

          

        

      

       

    

    
      
      

      
        
          	
                  10. 

                	
                  Duty to
      Indemnify.  FMS shall indemnify, defend and hold harmless
      Consultant from and against any and all costs, losses, liabilities,
      damages, lawsuits, deficiencies, claims and expenses, including without
      limitation, interest, penalties, costs of litigation, and other losses,
      reasonable attorneys’ fees and all amounts paid in investigation, defense
      or settlement of any of the foregoing (collectively, the “Damages”),
      incurred in connection with, arising out of, resulting from or incident to
      any provision of Services under this Agreement; provided, however, that
      FMS shall have no duty under this section with respect to (i) Damages
      resulting from Consultant’s gross negligence or intentional or willful
      misconduct or (ii) medical malpractice claims of the type which are
      excluded from coverage under FMS’ liability insurance
      policies.  If FMS acknowledges its duty of indemnification under
      this section with respect to any third party suit, demand or claim against
      Consultant, FMS shall be entitled to select counsel to handle the defense
      of such matter and shall be entitled to settle such matter without
      Consultant’s consent if the settlement settles all outstanding claims
      against Consultant relating to the subject matter of the suit, demand or
      claim and can not reasonably be expected to expose Consultant to
      additional suits, demands or
claims.

                

        

      

      

      
        
          	
                  11. 

                	
                  Code of Business
      Ethics.  Consultant represents and warrants that he has
      reviewed the Ethics and Business Conduct Policy (a copy of which is
      attached to this Agreement) and agrees that he will comply in all respects
      with such policy, as such may be updated from time to time, in all matters
      relating to this Agreement and his provision of Services to FMS and its
      Affiliates.  FMS may revise the Ethics and Business Conduct
      Policy at any 

                

        

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      

        
          	
                    

                	
                  time.  If
      FMS revises the Ethics and Business Conduct Policy, FMS shall provide the
      revised policy to Consultant.

                

        

         

      

      
        
          	
                  12. 

                	
                  Notices.  Any
      notice required to be given under this Agreement shall be in writing and
      shall be deemed to have been effectively given (i) when personally
      delivered, or (ii) five working days after being sent by registered or
      certified air mail, postage prepaid and return receipt requested, in each
      case addressed as follows:

                

        

      

      

      
        	
                 
      

              	
                If
      to FMS:

              

      

      

      
        	
                 
      

              	
                Richard
      C. Adkerson

              

      

      
        	
                 
      

              	
                Chairman
      of the Board, FM Services

              

      

      
        	
                 
      

              	
                c/o
      Freeport-McMoRan Copper & Gold
Inc.

              

      

      
        	
                 
      

              	
                1
      North Central Avenue

              

      

      
        	
                 
      

              	
                Phoenix,
      Arizona 85004

              

      

      

      
        	
                 
      

              	
                If
      to Consultant:

              

      

      

      
        	
                 
      

              	
                Dr.
      J. Taylor Wharton

              

      

      
        	
                 
      

              	
                1332
      Milford Street

              

      

      
        	
                 
      

              	
                Houston,
      Texas 77006

              

      

      

      

      
        
          	
                   

                	
                  Or
      to an alternate address which is specified by notice given as
      aforesaid.

                

        

      

      

      
        
          	
                  13. 

                	
                  Disputes.  The
      parties agree that any disputes arising out of this Agreement which cannot
      be amicably resolved shall be brought before the Federal District Court
      for the Eastern District of Louisiana or, if federal jurisdiction is not
      available, in the District Courts of Orleans or Jefferson Parish,
      Louisiana, U.S.A. Each party hereby consents to the exclusive jurisdiction
      of said courts over all disputes arising out of this Agreement and agrees
      that service of process in any manner authorized by said court shall be
      sufficient for all purposes.

                

        

      

      

      
        
          	
                  14. 

                	
                  Entire
      Agreement.  This Agreement constitutes the entire
      understanding of the parties with respect to the provision of Services by
      Consultant and, as the Effective Date, supersedes all prior written and
      oral agreements, understandings, representations or commitments by the
      parties with respect to such Services.  This Agreement may not
      be amended, modified or altered except by a written agreement executed by
      the parties hereto.

                

        

      

      

      
        
          	
                  15. 

                	
                  Governing
      Law.  This Agreement shall be governed by and construed
      in accordance with the laws of the State of Louisiana,
    U.S.A.

                

        

      

      

      (signature
page follows)

      

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

      IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the
date first above written.

      

      

      

      
        	
                 
      

              	
                FM
      SERVICES COMPANY

              

      

      

      
        	
                By:

              	
                /s/
      Richard C. Adkerson

              
	
                Name:

              	
                Richard
      C. Adkerson

              
	
                Title

              	
                Chairman
      of the Board

              

      

      

      

      
        	
                 
      

              	
                CONSULTANT:

              

      

      

      

      
        	
                By:

              	
                /s/
      Dr. J. Taylor Wharton

              
	
                Name:

              	
                Dr.
      J. Taylor Wharton

              

      

      

      

      

      

      
        
           

        

        
          5ex10-57.htm

    
      

    

    Exhibit
10.57

    

    

    Executive
Employment Agreement

    

    This
Executive Employment Agreement (“Agreement”) between Freeport-McMoRan Copper
& Gold Inc., a Delaware corporation (the “Company”), and Richard C. Adkerson
(the “Executive”) is dated effective as of January 29, 2008 (the “Agreement
Date”).

     

    W
I T N E S S E T H:

    

    WHEREAS,
the Executive currently serves as an officer of the Company;

     

    WHEREAS,
pursuant to the terms of this Agreement, the Company desires to retain the
services of the Executive and the Executive desires to continue to provide
services to the Company;

     

    WHEREAS,
during the course of providing services to the Company, the Executive has or
will have received extensive and unique knowledge of, experience in and access
to resources involving, the Mining Business (as defined below) at a substantial
cost to the Company, which Executive acknowledges has enhanced or substantially
will enhance Executive’s skills and knowledge in such business;

     

    WHEREAS,
during the course of providing services to the Company, Executive has had and
will continue to have access to valuable oral and written information, knowledge
and data relating to the business and operations of the Company and its
subsidiaries that is non-public, confidential or proprietary in nature and is
particularly useful in the Mining Business; and

     

    WHEREAS,
in view of the opportunities provided by the Company to Executive, the cost
thereof to the Company, and the need for the Company to be protected against
disclosures by Executive of the Company’s and its subsidiaries’ trade secrets
and other non-public, confidential or proprietary information, the Company and
Executive desire, among other things, to prohibit Executive from disclosing or
utilizing, outside the scope of his employment with the Company, any non-public,
confidential or proprietary information, knowledge and data relating to the
business and operations of the Company or its subsidiaries received by Executive
during the course of his employment, and to restrict the ability of Executive to
compete with the Company or its subsidiaries for a limited period of
time.

     

    NOW,
THEREFORE, for and in consideration of the continued employment of Executive by
the Company and the payment of salary, benefits and other compensation to
Executive by the Company, the parties hereto agree as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Article
I

     

    Employment
Capacity

     

    1.     Capacity and Duties of
Executive.  The Executive is employed by the Company to render
services on behalf of the Company as President and Chief Executive
Officer.  The Executive will perform such duties as are assigned to
the individual holding the title or titles held by him from time to time in the
Company’s By-laws and such other duties as may be prescribed from time to time
by the Chairman of the Board or the Company’s Board of Directors (the “Board”),
which duties shall be consistent with the position of President and Chief
Executive Officer.

     

    2.     Term.  The term of
this Agreement (the “Employment Term”) will commence on the Agreement Date and
will expire January 1, 2012; subject to extension as provided in Article V,
Section 3(a) in the event of a Change of Control (as defined in Article V,
Section 2), and subject to any earlier termination of Executive’s employment
pursuant to this Agreement.  Commencing on January 1, 2012, and each
January 1st
thereafter, the Employment Term will automatically be extended for one
additional year unless not later than August 1 of the immediately preceding
year, the Corporate Personnel Committee has given written notice to the
Executive that it does not wish to extend this Agreement.

     

    3.     Devotion to
Responsibilities.  The Executive will devote significant
business time to the business of the Company, will use his best efforts to
perform faithfully and efficiently his duties under this Agreement, and will not
engage in or be employed by any other business; provided, however, that nothing
herein will prohibit the Executive from (a) serving as an officer and director
of McMoRan Exploration Co. (“McMoRan”), FM Services Company or any of their
affiliates or successors, (b) serving as a member of the board of directors,
board of trustees or the like of any for-profit or non-profit entity that does
not compete with the Company, or performing services of any type for any civic
or community entity, whether or not the Executive receives compensation
therefor, (c) investing his assets in such form or manner as will require no
more than nominal services on the part of the Executive in the operation of the
business of the entity in which such investment is made, or (d) serving in
various capacities with, and attending meetings of, industry or trade groups and
associations, as long as the Executive’s activities permitted by clauses (a),
(b), (c) and (d) above do not materially and unreasonably interfere with the
ability of the Executive to perform the services and discharge the
responsibilities required of him under this
Agreement.  Notwithstanding clause (c) above, the Executive may not,
without the approval of the Corporate Personnel Committee of the Board,
beneficially own 5% or more of the equity interests of a business organization
required to file periodic reports with the Securities and Exchange Commission
under the Securities Exchange Act of 1934 (the “Exchange Act”) other than the
Company or McMoRan, and the Executive may not beneficially own more than 2% of
the equity interests of any business organization that competes with the
Company.  For purposes of this paragraph, “beneficially own” has the
meaning ascribed to that term in Rule 13d-3 under the Exchange Act.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Article
II

     

    Compensation
and Benefits

     

    1.     Salary.  The Company
will pay the Executive a salary (“Base Salary”) at an annual rate per fiscal
year of the Company (“Fiscal Year”) of $2,500,000, which will be payable to the
Executive in equal semi-monthly installments.  Base Salary may be
remitted to the Executive on behalf of the Company by an affiliate of the
Company.

     

    2.     Bonus.  The
Executive will be eligible to receive an annual incentive bonus (the “Bonus”),
payable, if at all, only with respect to services that the Executive provides to
the Company.  Any Bonus will be determined, accrued and paid in
accordance with the terms of the Company’s 2005 Annual Incentive Plan, as
amended, or any incentive or bonus compensation plan that is a successor or
substitute therefor, that covers certain individuals designated by the Corporate
Personnel Committee of the Board (the “Committee”).  The Executive
acknowledges and agrees that this Section 2 imposes no obligation on the Company
to award any bonus to the Executive.

     

    3.     Award of Restricted Stock
Units.  Effective on the Agreement Date or as otherwise
provided by resolution of the Corporate Personnel Committee of the Company’s
Board of Directors approving such grant, Executive shall receive 200,000
restricted stock units on the terms and conditions set forth in a restricted
stock unit agreement entered into between the Company and the Executive, the
form of which is attached hereto as Exhibit A.

     

    4.     Equity Awards and Long-Term
Performance Units.  The Executive will continue to be eligible
to participate in all short-term and long-term equity and non-equity incentive
plans in which the Executive currently participates or which may be offered in
the future to the most senior executives of the Company.

     

    5.     Vacation.  The
Executive will be entitled to paid vacation and holidays as provided to
executives of the Company generally.

     

    6.     Indemnification and
Insurance.  In accordance with the Company’s Certificate of
Incorporation, the Company will indemnify the Executive, to the fullest extent
permitted by applicable the law, for any and all claims brought against him
arising out his services to the Company and its subsidiaries.  In
addition, the Company will continue to maintain a directors’ and officers’
insurance policy covering the Executive substantially in the form of the policy
in existence as of the Agreement Date to the extent such policy remains
available at reasonable commercial terms.

     

    7.     Other Benefits.  The
Executive will continue to be entitled to all benefits and perquisites presently
provided to him or generally to the most senior executives of the Company and be
eligible to participate in and receive all benefits under welfare benefit plans,
practices, policies and programs (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans and programs) available generally to the
most senior executives of the Company.

     

    8.     Expenses.  The
Executive will be entitled to receive prompt reimbursement for all reasonable
business expenses (including food, transportation, entertainment and lodging)

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    incurred
from time to time on behalf of the Company in the performance of his duties,
upon the presentation of such supporting invoices, documents and forms as the
Company reasonably requests.

     

    Article
III

     

    Termination
of Employment

     

    1.     Death.  The
Executive’s status as an officer and employee will terminate immediately and
automatically upon the Executive’s death.

     

    2.     Disability.  The
Company may terminate Executive’s status as an officer and employee for
“Disability” as follows:

     

    (a)     If the
Executive has a disability that entitles him to receive benefits under the
Company’s long-term disability insurance policy in effect at the time either
because he is Totally Disabled or Partially Disabled, as such terms are defined
in the Company’s policy in effect as of the Agreement Date or as similar terms
are defined in any successor policy, then the Company may terminate Executive’s
status as an officer and employee effective on the first day on which the
Executive receives a payment under such policy (or on the first day that he
would be so eligible, if he had applied timely for such payments).

     

    (b)     If the
Company has no long-term disability plan in effect, and if (i) because of
physical or mental illness the Executive is rendered incapable of satisfactorily
discharging his duties and responsibilities under this Agreement for a period of
90 consecutive days and (ii) a duly qualified physician chosen by the Company
and reasonably acceptable to the Executive or his legal representatives so
certifies in writing, the Board will have the power to determine that the
Executive has become disabled.  If the Board makes such a
determination, the Company will have the continuing right and option, during the
period that such disability continues, and by notice given in the manner
provided in this Agreement, to terminate the status of Executive as an officer
and employee.  Any such termination will become effective 30 days
after such notice of termination is given, unless within such 30-day period, the
Executive becomes capable of rendering services of the character contemplated
hereby (and a physician chosen by the Company and reasonably acceptable to the
Executive or his legal representatives so certifies in writing) and the
Executive in fact resumes such services.

     

    (c)     The
“Disability Effective Date” will mean the date on which termination of
Executive’s status as an officer and employee becomes effective due to
Disability.

     

    3.     Cause.  The Company
may terminate the Executive’s status as an officer and employee for “Cause,”
which is defined as follows:

     

    (a)     The
Executive’s willful and continued failure to perform substantially the
Executive’s duties with the Company or its affiliates (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the Executive by the
Board, which specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive’s
duties;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b)     The
Executive’s material breach of this Agreement after a written demand is
delivered to the Executive by the Board, which specifically identifies the
manner in which the Board believes that the Executive has materially breached
this Agreement;

     

    (c)     The final
conviction of the Executive or an entering of a guilty plea or a plea of no
contest by the Executive to a felony;

     

    (d)     Unauthorized
acts or omissions by the Executive that could reasonably be expected to cause
material financial harm to the Company or materially disrupt Company
operations;

     

    (e)     The
Executive’s commission of an act of dishonesty (even if not a crime) resulting
in the enrichment of the Executive at the expense of the Company;
or

     

    (f)     The
Executive’s knowing falsification or knowing attempted falsification of
financial records of the Company in violation of SEC Rule 13b2-1.

     

    For
purposes of this provision, no act or failure to act, on the part of the
Executive, will be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without a reasonable belief that the act
or omission was in the best interests of the Company or its
affiliates.  Any act, or failure to act, based on authority given
pursuant to a resolution duly adopted by the Board, the instructions of a more
senior officer of the Company or the advice of counsel to the Company or its
affiliates will be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company or its
affiliates.  The termination of employment of the Executive will not
be deemed to be for Cause unless and until there has been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided
to the Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, the Executive has engaged in any of the conduct described in
subparagraphs (a) through (f) above, and specifying the particulars of such
conduct.

     

    4.     Good Reason.  The
Executive may terminate his status as an officer and employee for “Good Reason,”
which is defined as follows:

     

    (a)     Any
failure by the Company or its affiliates to comply with any of the provisions of
this Agreement (including, but not limited to, the failure to provide the
Executive with the position set forth in Article I, Section 1 and, at a minimum,
the Base Salary set forth in Article II, Section 1), other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith that is
remedied within 10 days after receipt by the Company of written notice thereof
from the Executive; or

     

    (b)     The
assignment to the Executive of any duties inconsistent in any material respect
with Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by this
Agreement, or any other action that results in a diminution in such position,
authority, duties or responsibilities, excluding for this 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    purpose
an isolated, insubstantial and inadvertent action not taken in bad faith that is
remedied within 10 days after receipt by the Company of written notice thereof
from the Executive.

     

    (c)     Following
a Change of Control, as defined in Article V hereof, “Good Reason” will also
include:

     

    (i)     Any
failure of the Company to provide the Executive with the position, authority,
duties and responsibilities at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 120-day period immediately preceding the Change of
Control.  Executive’s position, authority, duties and responsibilities
after a Change of Control shall not be considered commensurate in all material
respects with Executive’s position, authority, duties and responsibilities prior
to a Change of Control unless after the Change of Control the Executive holds an
equivalent position in the Company;

     

    (ii)    The
Company or its affiliates requiring the Executive to be based at any office or
location other than the office or location where Executive was employed
immediately preceding the Change of Control, or requiring the Executive to
travel on business to a substantially greater extent than required immediately
prior to a Change of Control; or

     

    (iii)    Any
failure by the Company to comply with and satisfy Article VIII, Sections 1(c)
and (d) of this Agreement.

     

    Any
determination of “Good Reason” made by the Executive in good faith and based
upon his reasonable belief and understanding shall be conclusive.

     

    5.     Termination by the
Company.  In addition to termination for death, Disability or
Cause, the Company may at any time terminate the Executive’s status as an
officer and employee for any reason or for no reason at all.

     

    6.     Retirement.  In
addition to termination for death or Good Reason, the Executive may at any time
retire and terminate his status as an officer and
employee.  “Retirement” (and variants thereof) for purposes of this
Agreement is defined as the Executive’s voluntary termination of his status as
an officer and employee at any time after reaching age 54, but shall not include
a termination for Good Reason.

     

    7.     Notice of Termination; Termination
Date.

     

    (a)     Other
than as a result of the death of Executive, any termination of Executive’s
status as an officer and employee shall be communicated to the other party by
Notice of Termination given in accordance with Article VIII, Section 2 of this
Agreement.  For purposes of this Agreement, a “Notice of Termination”
means a written notice that (i) indicates the specific termination provision in
this Agreement on which the party relies,  (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provisions so indicated and (iii)
if the Termination Date (as defined below) is other than the date of receipt of
such notice, specifies the Termination Date.  The Company’s failure to
set forth in the Notice of Termination any fact or circumstance that contributes
to a showing of Disability or Cause will not negate the effect of the notice nor
waive 

     

    
      
        
        

      

      
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    any right
of the Company or preclude the Company from asserting such fact or circumstance
in enforcing the Company’s rights.

     

    (b)     “Termination
Date” means, if Executive’s status as an officer and employee is terminated (i)
by reason of Executive’s death, the date of Executive’s death, (ii) by reason of
Disability, the Disability Effective Date, (iii) by the Company other than by
reason of death or Disability, the date of delivery of the Notice of Termination
or any later date specified in the Notice of Termination, which date will not be
more than 30 days after the giving of the notice, or (iv) by the Executive other
than by reason of death, the date of delivery of the Notice of Termination or
any later date specified in the Notice of Termination, which date will not be
more than 30 days after the giving of the notice.

     

    Article
IV

     

    Obligations
upon Termination

     

    1.     Separation from
Service.  No payments or benefits provided herein that are paid
because of a termination of employment under circumstances described herein
shall be paid, unless such termination of employment also constitutes a
“separation from service” within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the regulations and guidance
issued thereunder (“Section 409A”).

     

    2.     Death, Disability, or
Retirement.  If (A) the Executive’s status as an officer and
employee is terminated by reason of the Executive’s death or Retirement, or (B)
the Company terminates the Executive’s status as an officer and employee by
reason of Executive’s Disability then, subject to the six-month delay set forth
in Article VIII, Section 14, if applicable,:

     

    (a)     The
Company will pay the Executive or his legal representatives the amount of the
Executive’s Base Salary earned through the Termination Date to the extent not
previously paid (the “Accrued Obligations”);

     

    (b)     No later
than sixty (60) days following the end of the fiscal quarter during which the
Termination Date occurs, the Company will pay to the Executive or his legal
representatives a pro rata bonus in an amount determined by calculating the
bonus that the Executive would receive for the Fiscal Year in which the
Termination Date occurs based upon the level of achievement of the applicable
performance goals through the end of the fiscal quarter in which the Termination
Date occurs, annualized as if such level of performance had continued throughout
the entire Fiscal Year and then multiplying such bonus amount by the fraction
obtained by dividing the number of days in the year through the Termination Date
by 365 (the “Pro Rata Bonus”);

     

    (c)     The
Company will pay or deliver, as appropriate, all other benefits due to
Executive  pursuant to any employee benefit plans and incentive plans
maintained by the Company or its subsidiaries with respect to services rendered
by the Executive prior to the Termination Date; and

     

    (d) In the
case of Executive’s Retirement, for a period commencing on the Termination Date
and ending on the earlier of  (i) the third anniversary of the
Termination Date, or (ii) the date that the Executive accepts new employment
(the “Continuation Period”), the 

     

    
      
        
        

      

      
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    Company
will at its expense maintain and administer for the continued benefit of
Executive all insurance and welfare benefit plans in which Executive was
entitled to participate as an employee of the Company as of the Termination
Date, except medical reimbursement benefits under the Company’s flex plans,
provided that Executive’s continued participation is possible under the general
terms and provisions of such plans and all applicable laws.  If the
Executive is a “specified employee” governed by Article VIII, Section 14, to the
extent that any benefits provided to the Executive under this Article IV,
Section 2(d) are taxable to the Executive, then, with the exception of
nontaxable medical insurance benefits, the value of the aggregate amount of such
taxable benefits provided to the Executive pursuant to this Article IV, Section
2(d) during the six month period following the Termination Date shall be limited
to the amount specified by Section 402(g)(1)(B) of Code for the year in which
the termination occurred.  The Executive shall pay the cost of any
benefits that exceed the amount specified in the previous sentence during the
six month period following the date of termination, and shall be reimbursed in
full by the Company during the seventh month after the Termination
Date.  The coverage and benefits (including deductibles and costs)
provided under any such benefit plan in accordance with this paragraph during
the Continuation Period will be no less favorable to Executive than the most
favorable of such coverages and benefits as of the Termination
Date.  If Executive’s participation in any such benefit plan is barred
or any such benefit plan is terminated, the Company will use commercially
reasonable efforts to provide Executive with compensation or benefits
substantially similar or comparable in value to those Executive would otherwise
have been entitled to receive under such plans.  At the end of the
Continuation Period, the Executive will have the option to have assigned to him,
at no cost and with no apportionment of prepaid premiums, any assignable
insurance owned by the Company that relates specifically to the
Executive.  Subject to the general terms and provisions of the plans
and all applicable laws, the Executive will be eligible for coverage under the
Company’s retiree medical plan or the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”) at the end of the Continuation Period or earlier cessation of the
Company’s obligation under the foregoing provisions of this
paragraph.

     

    To the
extent that the amounts payable under this Article IV, Section 2(d) are
reimbursements and other separation payments described under Treasury
Regulations Section 1.409A-1(b)(9)(v), such payments do not provide for the
deferral of compensation.  If they do constitute deferral of
compensation governed by Section 409A, they shall be deemed to be reimbursements
or in-kind benefits governed by Treasury Regulations Section
1.409A-3(i)(1)(iv).  If the previous sentence applies, (i) the amount
of expenses eligible for reimbursement or in-kind benefits provided during the
Executive’s taxable year shall not affect the expenses eligible for
reimbursement or in-kind benefits in any other taxable year, (ii) the
reimbursement of an eligible expense must be made on or before the last day of
the Executive’s taxable year following the taxable year in which the expense was
incurred and (iii) the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit.

    

    3.     Cause.  If the
Company terminates the Executive’s status as an officer and employee for Cause,
the Company will pay to the Executive the Accrued Obligations.  The
Company will have no further obligation to the Executive other than for
obligations imposed by law and obligations for any benefits due the Executive
pursuant to any employee benefit plans 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    and
incentive plans maintained by the Company or its subsidiaries with respect to
services rendered by the Executive prior to the Termination Date.

     

    4.     Termination by Executive for Good
Reason or by Company for Reasons other than Death, Disability or
Cause.  If the Executive terminates his status as an officer
and employee for Good Reason or the Company terminates the Executive’s status as
an officer and employee other than for death, Disability or Cause, then subject
to the six-month delay set forth in Article VIII, Section 14, if
applicable:

     

    (a)    The
Company will pay to the Executive the Accrued Obligations and the Pro Rata
Bonus;

     

    (b)    Within
twenty (20) business days of the Termination Date, the Company will pay to the
Executive in a lump sum in cash an amount equal to three times the sum of (i)
the Executive’s Base Salary in effect at the Termination Date and (ii) average
of the Bonuses paid to the Executive for the immediately preceding three Fiscal
Years, not including any
premium received in connection with Executive’s participation in any restricted
stock program offered by the Company;

     

    (c)    All stock
options will become immediately exercisable as of the Termination Date and will
remain exercisable until the expiration date specified in the applicable notice
of grant of nonqualified stock option;

     

    (d)    All
restricted stock units granted to the Executive, except the restricted stock
units granted pursuant to Article II, Section 3 herein, will vest as of the
Termination Date to the extent not previously vested and will convert to common
stock of the Company, provided any applicable performance conditions have been
met as of the Termination Date;

     

    (e)    The
Executive’s performance units under the Company’s Long-Term Performance
Incentive Plan will be credited with the annual earnings per share or net loss
per share (as defined in the plan) for the Fiscal Year in which the Termination
Date occurs and all amounts credited to the Executive’s performance unit account
will be fully vested and will be paid out within 60 days of the end of the
Fiscal Year in which the Termination Date occurs;

     

    (f)    The
Company will pay or deliver, as appropriate, all other benefits due the
Executive pursuant to any employee benefit plans maintained by the Company or
its subsidiaries with respect to services rendered by the Executive prior to the
Termination Date; and

     

    (g)    For the
Continuation Period, the Company shall at its expense maintain and administer
for the continued benefit of Executive the benefits provided for under Article
IV, Section 2(d).

     

    5.     Resignation from Boards of
Directors.  If Executive is a director of the Company and his
employment is terminated for any reason other than death, the Executive will, if
requested by the Company, immediately resign as a director of the Company and
its subsidiaries.  If such resignation is not received within 20
business days after the Executive actually receives written notice from the
Company requesting the resignations, the Executive will forfeit any right to
receive any payments pursuant to this Agreement.

     

    
      
        
        

      

      
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    Article
V

     

    Change
of Control

     

    1.     Applicability.  In
the event that a Change of Control occurs during the Employment Term, then the
provisions of this Article V shall be applicable.

     

    2.     Definition
of 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 Article V, Section 2(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 Article V, Section 2(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 Article V, Section 2(a)(iii) hereof;
or

     

    (ii)     individuals
who as of the effective date of this Agreement, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the effective date of this Agreement whose election, or nomination for election
by the Company’s shareholders, 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:

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (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 Company, and

     

    (B)     no Person
together with all Affiliates of such Person (excluding the Company and any
employee benefit plan or related trust of the Company or any subsidiary of the
Company) Beneficially Owns 30% or more of the then outstanding shares of common
stock of the Company or 30% or more of the combined voting power of the then
outstanding voting securities of the Company, and

     

    (C)     at least
a majority of the members of the board of directors of the Company 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 shareholders of the Company of a complete liquidation or dissolution of
the Company.

     

    (b)     As used
in this Section 2 and elsewhere in this Agreement, the following terms have the
meanings indicated:

     

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

     

    (iv)    Majority
Shares:  “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.

     

    (v)    Person:  “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.

     

    (vi)   Threshold
Percentage:  “Threshold Percentage” means 30% of all then outstanding
Common Stock.

     

    
      
        
        

      

      
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    3.     Effect.

     

    Upon a
Change of Control, the Employment Term and the benefits provided by Article II
hereof shall automatically continue following such Change of Control for a
period equal to the then remaining Employment Term or three years from the Change of
Control, whichever period is longer, subject to any earlier termination of
Executive’s status as an employee pursuant to this Agreement.

     

    4.     Obligations upon Termination
Following a Change of Control.

     

    (a)     Death, Disability or
Retirement.  If, after a Change of Control and during the
Employment Term, (i) the Executive’s status as an officer and employee is
terminated by reason of the Executive’s death, (ii) the Company terminates the
Executive’s status as an officer and employee by reason of Executive’s
Disability, or (iii) the Executive Retires and terminates his status as an
officer and employee, then the Company shall pay to the Executive the benefits
and payments provided for in Article IV, Section 2, subject to the six-month
delay set forth in Article VIII, Section 14, if applicable.

     

    (b)     Cause.  If,
after a Change of Control and during the Employment Term, the Executive’s status
as an officer and employee is terminated by the Company for Cause, the Company
shall pay to the Executive the benefits and payments provided for in Article IV,
Section 3.

     

    (c)     Termination by Executive for
Good Reason or by Company for Reasons other than Death, Disability or
Cause.  If, after a Change of Control and during the Employment
Term, the Executive terminates his status as an officer and employee for Good
Reason, or the Company terminates the Executive’s status as an officer and
employee other than for death, Disability or Cause, then, subject to the
six-month delay set forth in Article VIII, Section 14, if
applicable,:

     

    (i)    The
Company shall pay to the Executive the Accrued Obligations and the Pro Rata
Bonus;

     

    (ii)   Within
twenty (20) business days of the Termination Date, the Company shall pay to the
Executive in a lump sum in cash an amount equal to three times, the sum of (A)
the Executive’s Base Salary in effect at the Termination Date and (B) the
highest bonus paid to the Executive for any of the immediately preceding three
Fiscal Years, not including any premium received in connection with the
Executive’s participation in any restricted stock program offered by the
Company;

     

    (iii)   The
Company will pay or deliver, as appropriate, all other benefits due the
Executive pursuant to any employee benefit plans and incentive plans maintained
by the Company or its affiliated companies with respect to services rendered by
the Executive prior to the Termination Date; and

     

    (iv)   For the
Continuation Period, the Company shall at its expense maintain and administer
for the continued benefit of Executive the benefits provided for under Article
IV, Section 2(d).

     

    
      
        
        

      

      
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    (d)     Resignation from Board of
Directors.  If the Executive is a director of the Company and
his status as an officer and employee is terminated for any reason other than
death, the Executive shall, if requested by the Company, immediately resign as a
director of the Company and its subsidiaries.  If such resignation is
not received within 20 business days after the Executive actually receives
written notice from the Company requesting the resignation, the Executive shall
forfeit any right to receive any payments pursuant to this
Agreement.

     

    (e)     Nondisclosure,
Noncompetition and Proprietary Rights.  The rights and
obligations of the Company and the Executive contained in Article VI hereof
shall continue to apply after a Change of Control.

     

    5.     Excise Tax
Provision.

     

    (a)    Notwithstanding
any other provisions of this Agreement, if a Change of Control occurs during the
original or extended term of this Agreement, in the event that any of the
payments or benefits received or to be received by or attributable to the
Executive in connection with the Change of Control or the Executive’s
termination of employment add language from Ruddy (whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement with the
Company, any Person whose actions result in a Change of Control or any Person
affiliated with the Company or such Person) (all such payments and benefits,
including the payments and benefits under Article V, Section 4(c) hereof, but
excluding any payment to be made pursuant to this Article V, Section 5, being
hereinafter referred to as the “Initial Payments”) will be subject (in whole or
in part) to an excise tax imposed by section 4999 of the Code or any similar tax
(the “Excise Tax”), the Company shall pay to the Executive an additional amount
(the “Gross-Up Payment”) such that the net amount retained by the Executive,
after deduction of (i) any Excise Tax on the Initial Payments, (ii) any federal,
state and local income and employment taxes on the Gross-Up Payment, (iii) any
Medicare tax on the Gross-Up Payment, and (iv) the Excise Tax on the Gross-Up
Payment, shall be equal to the Initial Payments.  Notwithstanding the
foregoing provisions of this Article V, Section 5(a), if it shall be determined
that the Executive is entitled to a Gross-Up Payment, but that the present value
as of the date of the Change of Control, determined in accordance with Sections
280G(b)(2)(ii) and 280G(d)(4) of the Code (the “Present Value”), of the Initial
Payments does not exceed 110% of the greatest Present Value of Initial
Payments  that could be paid to the Executive such that the receipt
thereof would not give rise to any Excise Tax (the “Safe Harbor Cap”), then no
Gross-Up Payment shall be made to the Executive and the amounts payable to the
Executive under this Agreement shall be reduced to the maximum amount that could
be paid to the Executive such that the Present Value of the Initial Payments
does not exceed the Safe Harbor Cap.  The reduction of the amounts
payable hereunder, if applicable, shall be made by reducing the benefits as
elected by the Executive.  For purposes of reducing the Initial
Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and
no other Initial Payments) shall be reduced.  If the reduction of the
amounts payable hereunder would not result in a reduction of the Present Value
of the Initial Payments to the Safe Harbor Cap, no amounts payable under this
Agreement shall be reduced pursuant to this provision.

     

    (b)     For
purposes of determining whether any of the Initial Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) all of the Initial
Payments shall be treated as “parachute payments” (within the meaning of the
Code) unless, in the opinion of 

     

    
      
        
        

      

      
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    tax
counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by
the accounting firm which was, immediately prior to the Change of Control, the
Company’s independent auditor (the “Auditor”), such payments or benefits (in
whole or in part) do not constitute parachute payments, (ii) all “excess
parachute payments” within the meaning of the Code shall be treated as subject
to the Excise Tax unless, in the opinion of Tax Counsel, such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered (within the meaning of the Code) in excess of the “Base
Amount” (within the meaning set forth in the Code) allocable to such reasonable
compensation, or are otherwise not subject to the Excise Tax, and (iii) the
value of any noncash benefits or any deferred payment or benefit shall be
determined by the Auditor in accordance with the principles of the
Code.  For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income tax at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of the Executive’s residence on the
date of termination of the Executive’s employment (or if there is no date of
termination, then the date on which the Gross-Up Payment is calculated for
purposes of this Article V, Section 5), net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

     

    (c)    In the
event that the Excise Tax is finally determined to be less than the amount taken
into account hereunder in calculating the Gross-Up Payment, the Executive shall
repay to the Company, within ten business days following the time that the
amount of such reduction in the Excise Tax is finally determined, the portion of
the Gross-Up Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and local
income and employment taxes imposed on the Gross-Up Payment being repaid by the
Executive, to the extent that such repayment results in a reduction in the
Excise Tax and a dollar-for-dollar reduction in the Executive’s taxable income
and wages for purposes of federal, state and local income and employment taxes,
plus interest on the amount of such repayment at 120% of the rate provided in
section 1274(b)(2)(B) of the Code).  In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder in calculating
the Gross-Up Payment (including by reason of any payment the existence or amount
of which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by the Executive with respect to such
excess) within ten business days following the time that the amount of such
excess is finally determined.  The Executive and the Company shall
each reasonably cooperate with the other in connection with any administrative
or judicial proceedings concerning the existence or amount of liability for
Excise Tax with respect to the Initial Payments.

     

    (d)    Subject
to the six-month delay set forth in Article VIII, Section 14, if applicable, the
Gross-Up Payment provided in this Article V, Section 5 shall be made not later
than the “Payment Day.”  The Payment Day shall be the tenth business
day following the date of termination, or, if the Executive becomes entitled,
before the Executive’s employment is terminated, to a Gross-Up Payment under
this Article V, Section 5, then not later than the tenth business day following
the date as of which the present value of the Initial Payments is calculated for
purposes of determining the amount of such Gross-Up
Payment.  Notwithstanding the preceding provisions of this Article V,
Section 5(d), if the amount of the Gross-Up Payment 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    cannot be
finally determined on or before the Payment Day, the Company shall pay to the
Executive on the Payment Day an estimate, as determined in accordance with
Article V, Section 5(b), of the minimum amount of the Gross-Up Payment to which
the Executive is clearly entitled and shall pay the remainder of the Gross-Up
Payment (together with interest on the unpaid remainder at 120% of the rate
provided in section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the Payment
Day.  In the event that the amount of the estimated Gross-Up Payment
so made exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to the Executive, payable on the tenth
business day after demand by the Company (together with interest at 120% of the
rate provided in section 1274(b)(2)(B) of the Code).  At the time that
any Gross-Up Payment is made pursuant to Article V, Section 5(a) (and at the
time that any additional Gross-Up Payment is made pursuant to Article V, Section
5(c)), the Company shall provide the Executive with a written statement setting
forth the manner in which any such payment was calculated and the basis for such
calculations including, without limitation, any opinions or other advice the
Company has received from Tax Counsel, the Auditor or other advisors or
consultants (and any such opinion or advice which is in writing shall be
attached to the statement). Notwithstanding any other provision hereof, the
Gross-Up Payment (including any additional Gross-Up Payment made pursuant to
Article V, Section 5(c)) must be paid no later than the end of the calendar year
following the year in which the Executive remits the related taxes, as required
by Treasury Regulations Section 1.409A-3(i)(l)(v).

     

    Article
VI

     

    Nondisclosure,
Noncompetition and Proprietary Rights

     

    1.     Certain
Definitions.  For purposes of this Agreement, the following
terms will have the following meanings:

     

    (a)  “Confidential
Information” means any information, knowledge or data of any nature and in any
form (including information that is electronically transmitted or stored on any
form of magnetic or electronic storage media) relating to the past, current or
prospective business or operations of the Company and its subsidiaries, that at
the time or times concerned is not generally known to persons engaged in
businesses similar to those conducted or contemplated by the Company and its
subsidiaries (other than information known by such persons through a violation
of an obligation of confidentiality to the Company), whether produced by the
Company and its subsidiaries or any of their consultants, agents or independent
contractors or by Executive, and whether or not marked confidential, including
without limitation information relating to the Company’s or its subsidiaries’
products and services, business plans, business acquisitions, processes, product
or service research and development ideas, methods or techniques, training
methods and materials, and other operational methods or techniques, quality
assurance procedures or standards, operating procedures, files, plans,
specifications, proposals, drawings, charts, graphs, support data, trade
secrets, supplier lists, supplier information, purchasing methods or practices,
distribution and selling activities, consultants’ reports, marketing and
engineering or other technical studies, maintenance records, employment or
personnel data, marketing data, strategies or techniques, financial reports,
budgets, projections, cost analyses, price lists, formulae and analyses,
employee lists, customer records, customer lists, customer source lists,
proprietary computer software, and internal notes and memoranda relating to any
of the foregoing.

     

    
      
        
        

      

      
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    (b)    “Mining
Business” means the exploration, mining, production, marketing and sale of
metals and ore containing metals.

     

    2.    Nondisclosure of Confidential
Information.  Executive will hold in a fiduciary capacity for
the benefit of the Company all Confidential Information obtained by Executive
during Executive’s employment (whether prior to or after the Agreement Date) and
will use such Confidential Information solely within the scope of his employment
with and for the exclusive benefit of the Company.  For a period of
five years after the Termination Date, Executive agrees (a) not to communicate,
divulge or make available to any person or entity (other than the Company) any
such Confidential Information, except upon the prior written authorization of
the Company or as may be required by law or legal process, and (b) to deliver
promptly to the Company any Confidential Information in his possession,
including any duplicates thereof and any notes or other records Executive has
prepared with respect thereto.  In the event that the provisions of
any applicable law or the order of any court would require Executive to disclose
or otherwise make available any Confidential Information, Executive will give
the Company prompt prior written notice of such required disclosure and an
opportunity to contest the requirement of such disclosure or apply for a
protective order with respect to such Confidential Information by appropriate
proceedings.

     

    3.    Limited Covenant Not to
Compete.  For a period of two years after the Termination Date,
Executive agrees that, with respect to each State of the United States or other
jurisdiction, or specified portions thereof, in which the Executive regularly
(a) makes contact with customers of the Company or any of its subsidiaries, (b)
conducts the business of the Company or any of its subsidiaries, or (c)
supervises the activities of other employees of the Company or any of its
subsidiaries, and in which the Company or any of its subsidiaries engages in
Mining Business as of the Termination Date, including without limitation the
counties of Yavapai, Gila, Greenlee, Graham and Pima, all in the State of
Arizona, Grant, New Mexico, Clear Creek, Colorado, and the countries of
Indonesia, Spain, Peru, Chile and the Democratic Republic of the Congo
(collectively, the “Subject Areas”), Executive will restrict his activities
within the Subject Areas as follows:

     

    (a)     Executive
will not, directly or indirectly, for himself or others, own, manage, operate,
control, be employed in an executive, managerial or supervisory capacity by,
consult with, assist or otherwise engage or participate in or allow his skill,
knowledge, experience or reputation to be used in connection with, the
ownership, management, operation or control of, any company or other business
enterprise engaged in the Mining Business within any of the Subject Areas;
provided, however, that nothing contained herein will prohibit Executive from
making passive investments as long as Executive does not beneficially own more
than 2% of the equity interests of a business enterprise engaged in the Mining
Business within any of the Subject Areas.  For purposes of this
paragraph, “beneficially own” will have the same meaning ascribed to that term
in Rule 13d-3 under the Exchange Act;

     

    (b)     Executive
will not call upon any customer of the Company or its subsidiaries for the
purpose of soliciting, diverting or enticing away the business of such person or
entity, or otherwise disrupting any previously established relationship existing
between such person or entity and the Company or its subsidiaries;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (c)     Executive
will not solicit, induce, influence or attempt to influence any supplier,
lessor, lessee, licensor, partner, joint venturer, potential acquiree or any
other person who has a business relationship with the Company or its
subsidiaries, or who on the Termination Date is engaged in discussions or
negotiations to enter into a business relationship with the Company or its
subsidiaries, to discontinue or reduce or limit the extent of such relationship
with the Company or its subsidiaries;

     

    (d)     Without
the consent of the Company, Executive will not make contact with any of the
employees of the Company or its subsidiaries with whom he had contact during the
course of his employment with the Company for the purpose of soliciting such
employee for hire, whether as an employee or independent contractor, or
otherwise disrupting such employee’s relationship with the Company or its
subsidiaries; and

     

    (e)     Without
the consent of the Company, Executive further agrees that, for a period of one
year from and after the Termination Date, Executive will not hire any employee
of the Company or its subsidiaries as an employee or independent contractor,
whether or not such engagement is solicited by Executive.

     

    4.     Nondisparagement.  During
and after the Employment Term, the Executive agrees to refrain from making any
statements and from taking any actions that disparage or could reasonably be
expected to harm the reputation of the Company and its subsidiaries or any of
their directors, officers or employees, and agrees that he will not voluntarily
assist or otherwise participate in any action or proceeding undertaken by any
other person that disparages or could reasonably be expected to materially harm
the reputation of the Company and its subsidiaries or any of their directors,
officers or employees.  Similarly, the Company agrees that its
directors and officers shall refrain from making any statements and from taking
any actions that disparage or could reasonably be expected to harm the
reputation of the Executive and agrees that its directors and officers will not
voluntarily assist or otherwise participate in any action or proceeding
undertaken by any other person that disparages or could reasonably be expected
to materially harm the reputation of the Executive.

     

    5.     Injunctive Relief; Other
Remedies.  Executive acknowledges that a breach by Executive of
Sections 2, 3 or 4 of this Article VI would cause immediate and irreparable harm
to the Company for which an adequate monetary remedy does not exist; hence,
Executive agrees that, in the event of a breach or threatened breach by
Executive of the provisions of Sections 2, 3 or 4 of this Article VI, the
Company will be entitled to injunctive relief restraining Executive from such
violation without the necessity of proof of actual damage or the posting of any
bond, except as required by non-waivable, applicable law.  Nothing
herein, however, will be construed as prohibiting the Company from pursuing any
other remedy at law or in equity to which the Company may be entitled under
applicable law in the event of a breach or threatened breach of this Agreement
by Executive, including without limitation the recovery of damages and/or costs
and expenses, such as reasonable attorneys’ fees, incurred by the Company as a
result of any such breach or threatened breach.  In addition to the
exercise of the foregoing remedies, the Company will have the right upon the
occurrence of any such breach to offset the damages of such breach as determined
by the Company, against any unpaid salary, bonus, commissions or reimbursements
otherwise owed to Executive.  In particular, Executive acknowledges
that the payments provided under Article IV are conditioned upon Executive
fulfilling any 

     

    
      
        
        

      

      
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    noncompetition
and nondisclosure agreements contained in this Article VI.  If
Executive at any time materially breaches any noncompetition or nondisclosure
agreements contained in this Article VI, then the Company may offset the damages
of such breach, as determined solely by the Company, against payments otherwise
due to Executive under Article IV or, at the Company’s option, suspend payments
otherwise due to Executive under Article IV during the period of such
breach.  Executive acknowledges that any such offset or suspension of
payments would be an exercise of the Company’s right to offset or suspend its
performance hereunder upon Executive’s breach of this Agreement; such offset or
suspension of payments would not constitute, and shall not be characterized as,
the imposition of liquidated damages.

     

    6.     Requests for Waiver in Cases of Undue
Hardship.  If the Executive should find that any of the
limitations in this Article VI impose a severe hardship on his ability to secure
other employment, then the Executive may ask the Company to waive the specified
limitations before accepting employment that otherwise would be a breach of
Executive’s obligations under this Agreement.  Such request must be in
writing and set forth the name and address of the organization with which
employment or another prohibited relationship is sought and the position, duties
or other activities that Executive seeks to perform, and the location of
performance.  The Company will consider the request and, in its sole
discretion, decide whether and on what conditions to grant such
waiver.

     

    7.     Governing Law of this Article VI;
Consent to Jurisdiction.  Any dispute regarding the
reasonableness of the covenants and agreements set forth in this Article VI or
the territorial scope or duration thereof, or the remedies available to the
Company upon any breach of such covenants and agreements, will be governed by
and interpreted in accordance with the laws of the State of the United States or
other jurisdiction in which the alleged prohibited competing activity or
disclosure occurs, and, with respect to each such dispute, the Company and
Executive each hereby consent to the jurisdiction of the state and federal
courts sitting in the relevant State (or, in the case of any jurisdiction
outside the United States, the relevant courts of such jurisdiction) for
resolution of such dispute, and agree that service of process may be made upon
him or it in any legal proceeding relating to this Article VI by any means
allowed under the laws of such jurisdiction.

     

    8.     Executive’s Understanding of this
Article.  Executive hereby represents to the Company that he
has read and understands, and agrees to be bound by, the terms of this Article
VI.  Executive acknowledges that the geographic scope and duration of
the covenants contained in Article VI are the result of arm’s-length bargaining
and are fair and reasonable in light of (a) the importance of the functions
performed by Executive and the length of time it would take the Company to find
and train a suitable replacement, (b) the nature and wide geographic scope of
the operations of the Company and its subsidiaries, (c) Executive’s level of
control over and contact with the business and operations of the Company and its
subsidiaries in various jurisdictions where same are conducted and (d) the fact
that all facets of the Mining Business are conducted by the Company and its
subsidiaries throughout the geographic area where competition is restricted by
this Agreement.  It is the desire and intent of the parties that the
provisions of this Agreement be enforced to the fullest extent permitted under
applicable law, whether now or hereafter in effect and, therefore, to the extent
permitted by applicable law, the parties hereto waive any provision of
applicable law that would render any provision of this Article VI invalid or
unenforceable.

     

    
      
        
        

      

      
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    Article
VII

     

    Binding
Arbitration

     

    1.    Binding Agreement to
Arbitrate.  Any claim or controversy arising out of any
provision of this Agreement (other than Article VI hereof), or the breach or
alleged breach of any such provision, will be settled by binding arbitration
administered by the American Arbitration Association (the “AAA”) under its
National Rules for the Resolution of Employment Disputes as in effect at the
time of the claim or controversy (the “Rules”), and judgment on the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.

     

    2.    Selection and Qualifications of
Arbitrators.  If no party to the arbitration makes a claim in
excess of $1.0 million, exclusive of interest and attorneys’ fees, the
proceedings will be conducted before a single neutral arbitrator selected in
accordance with the Rules.  If any party makes a claim that exceeds
$1.0 million, the proceedings will be conducted before a panel of three neutral
arbitrators selected in accordance with the Rules.

     

    3.    Location of
Proceedings.  The place of arbitration will be in Phoenix,
Arizona.

     

    4.    Remedies.  Any award
in an arbitration initiated under this Article VII will be limited to actual
monetary damages, including if determined appropriate by the arbitrator(s) an
award of costs and fees to the prevailing party.  “Costs and fees”
mean all reasonable pre-award expenses of the arbitration, including
arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses
such as copying, telephone, witness fees and attorneys’ fees.  The
arbitrator(s) will have no authority to award consequential, punitive or other
damages not measured by the prevailing party’s actual damages, except as may be
required by statute.

     

    5.    Opinion.  The award
of the arbitrators will be in writing, will be signed by a majority of the
arbitrators, and will include findings of fact and a statement of the reasons
for the disposition of any claim.

     

    Article
VIII

     

    Miscellaneous

     

    1. Binding
Effect.

     

    (a)     This
Agreement will be binding upon and inure to the benefit of the Company and any
of its successors or assigns.

     

    (b)     This
Agreement is personal to the Executive and will not be assignable by the
Executive without the consent of the Company (there being no obligation to give
such consent) other than such rights or benefits as are transferred by will or
the laws of descent and distribution.

     

    (c)     The
Company will require any successor to or assignee of (whether direct or
indirect, by purchase, merger, consolidation or otherwise) all or substantially
all of the assets of the Company (i) to assume unconditionally and expressly
this Agreement and (ii) to agree to perform all of the obligations under this
Agreement in the same manner and to the same extent as would have been required
of the Company had no assignment or succession occurred, such

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    assumption
to be set forth in a writing reasonably satisfactory to the
Executive.  In the event of any such assignment or succession, the
term “Company” as used in this Agreement will refer also to such successor or
assign.

     

    (d)     The
Company shall also require all entities that control or that after the
transaction will control (directly or indirectly) the Company or any such
successor or assignee to agree to cause to be performed all of the obligations
under this Agreement, such agreement to be set forth in a writing reasonably
satisfactory to the Executive.

     

    2.     Notices.  All
notices hereunder must be in writing and unless otherwise specifically provided
herein, will be deemed to have been given upon receipt of delivery
by:  (a) hand (against a receipt therefor), (b) certified or
registered mail, postage prepaid, return receipt requested, (c) a nationally
recognized overnight courier service (against a receipt therefor) or (d)
telecopy transmission with confirmation of receipt.  All such notices
must be addressed as follows:

     

    If to the
Company, to:

     

    Freeport-McMoRan
Copper & Gold Inc.

    One North
Central Avenue

    Phoenix,
Arizona 85004

    Attention:  Chairman
of Corporate Personnel Committee

    

    If to the
Executive, to:

     

    Richard
C. Adkerson

    One North
Central Avenue

    Phoenix,
Arizona 85004

    

    or such
other address as to which any party hereto may have notified the other in
writing.

    

    3.     Governing Law.  This
Agreement will be construed and enforced in accordance with and governed by the
internal laws of the State of Delaware without regard to principles of conflict
of laws, except as expressly provided in Article VI above with respect to the
resolution of disputes arising under, or the Company’s enforcement of, Article
VI of this Agreement.

     

    4.     Withholding.  The
Executive agrees that the Company has the right to withhold, from the amounts
payable pursuant to this Agreement, all amounts required to be withheld under
applicable income and/or employment tax laws, or as otherwise stated in
documents granting rights that are affected by this Agreement.

     

    5.     Severability.  If
any term or provision of this Agreement or the application thereof to any person
or circumstance, will at any time or to any extent be invalid, illegal or
unenforceable in any respect as written, Executive and the Company intend for
any court construing this Agreement to modify or limit such provision
temporally, spatially or otherwise so as to render it valid and enforceable to
the fullest extent allowed by law.  Any such provision that is not
susceptible of such reformation will be ignored so as to not affect any other
term or 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    provision
hereof, and the remainder of this Agreement, or the application of such term or
provision to persons or circumstances other than those as to which it is held
invalid, illegal or unenforceable, will not be affected thereby and each term
and provision of this Agreement will be valid and enforced to the fullest extent
permitted by law.

     

    6.     Waiver of
Breach.  The waiver by either party of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach thereof.

     

    7.     Remedies Not
Exclusive.  Except as provided in Article VII hereof, no remedy
specified herein will be deemed to be such party’s exclusive remedy, and
accordingly, in addition to all of the rights and remedies provided for in this
Agreement, the parties will have all other rights and remedies provided to them
by applicable law, rule or regulation.

     

    8.     Legal Fees.

     

    (a)     Except as
otherwise provided herein, the Company agrees to pay all legal fees and expenses
that the Executive may reasonably incur as a result of any contest by the
Company, the Executive or others with respect to the validity or enforceability
of, or liability under, any provision of this Agreement (including as a result
of any contest by the Executive about the amount or timing of any payment
pursuant to this Agreement), provided that the Executive prevails on any
material claim.

     

    (b)    The
Company agrees to pay, as incurred, all legal fees and expenses that the
Executive may reasonably incur in connection with any tax audit or proceeding to
the extent attributable to the application of section 4999 of the Code to any
payment or benefit provided under this Agreement.

     

    (c)    The
payment of or reimbursement for legal fees under this Article VIII, Section 8,
shall comply with the requirement that non-qualified deferred compensation be
paid on a specified date or pursuant to a fixed schedule, which requires that
(1) the amount of benefits or reimbursements provided during one calendar year
shall not affect the amount of benefits or reimbursements to be provided in any
other calendar year, (2) the reimbursement of any eligible expense shall be made
no later than the last day of the calendar year following the year in which the
expense was incurred, and (3) the right to reimbursement or benefits hereunder
is not subject to liquidation or exchange for another benefit.

     

    9.    Company’s Reservation of
Rights.  The Executive acknowledges and understands that he
serves at the pleasure of the Board and that the Company has the right at any
time to terminate or change the Executive’s status as an officer and employee of
the Company, subject to the rights of the Executive to claim the benefits
conferred by this Agreement.

     

    
      
         

      

      
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    10.    Jury Trial
Waiver.  THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT.

     

    11.    Survival.  The
rights and obligations of the Company and Executive contained in Article VI of
this Agreement will survive the termination of the
Agreement.  Following the Termination Date, each party will have the
right to enforce all rights, and will be bound by all obligations, of such party
that are continuing rights and obligations under this Agreement.

     

    12.    Prior Employment
Agreement.  This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, between the parties hereto
with respect to the subject matter hereof.  Specifically, the
Executive Employment Agreement between the Executive and the Company dated April
30, 2001, as amended on December 10, 2003, and the Change of Control Agreement
between the Executive and the Company dated April 30, 2001, as amended as of
December 10, 2003, shall automatically terminate as of the effectiveness of this
Agreement. This
Agreement may not be amended orally, but only by an agreement in writing by the
parties hereto.

     

    13.    Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.

     

    14.    Section 409A of the Internal Revenue
Code.

     

     (a)     It is the
intention of the parties that payments or benefits payable under this Agreement
not be subject to the additional tax imposed pursuant to Section 409A, and the
provisions of this Agreement shall be construed and administered in accordance
with such intent.  To the extent any potential payments or benefits
could become subject to Section 409A, the parties shall cooperate to amend this
Agreement with the goal of giving the Executive the economic benefits described
herein in a manner that does not result in such tax being imposed.  If
the parties are unable to agree on a mutually acceptable amendment, the Company
may, without the Executive’s consent and in such manner as it deems appropriate,
amend or modify this Agreement or delay the payment of any amounts hereunder to
the minimum extent necessary to meet the requirements of Section
409A.

     

    (b)    If
Executive is a “specified employee,” any payments payable as a result of
Executive’s termination of employment (other than as a result of death) shall
not be payable before the earlier of (i) the first business day that is more
than six months after Executive’s Termination Date, (ii) the date of Executive’s
death, or (iii) the date that otherwise complies with the requirements of
Section 409A.  “Specified employee” shall mean the Executive if the
Executive is a key employee under Treasury Regulations Section 1.409A-1(i)
because of final and binding action taken by the Board or its Corporate
Personnel Committee, or by operation of law or such regulation.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (c)    No
acceleration of payments and benefits provided for in this Agreement shall be
permitted, except that the Company may accelerate payment, if permitted by
Section 409A, as necessary to allow the Executive to pay FICA taxes on amounts
payable hereunder and additional taxes resulting from the payment of such FICA
amount, or as necessary to pay taxes and penalties arising as a result of the
payments provided for in this Agreement failing to meet the requirements of
Section 409A.

     

    [remainder
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    IN
WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be
executed as of the Agreement Date.

     

    Freeport-McMoRan Copper & Gold
Inc.

    

    By:       /s/ H.
Devon Graham,
Jr.                                                                  

    H. Devon Graham, Jr.

     Director and Chairman of
the

          
Corporate Personnel Committee of the

                               Board
of Directors

    

    Executive

     

                                                    /s/ Richard
C. Adkerson

                                                                      
Richard C. Adkerson

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    Signature
Page of Executive Employment Agreement

    between
Freeport-McMoRan Copper & Gold Inc.

    and
Richard C. Adkerson

    

    

    

    

    
      
         

      

      
        24

        
          

        

      

      
         

        
          Exhibit
A to

          Executive
Employment Agreement

          

          

        

      

    

    FREEPORT-McMoRan
COPPER & GOLD INC.

    

    FORM
OF

    PERFORMANCE-BASED

    RESTRICTED
STOCK UNIT AGREEMENT

    UNDER
THE 2006 STOCK INCENTIVE PLAN

    

    AGREEMENT
dated as of January 29, 2008 (the “Grant Date”), between Freeport-McMoRan Copper
& Gold Inc., a Delaware corporation (the “Company”), and Richard C. Adkerson
(the “Executive” or the “Participant”).

     

    1.     (a)           The
Executive and the Company have entered into an Executive Employment Agreement
effective as of January 29, 2008 (the “Employment Agreement”). As set forth in
Article II, Section 3 of the Employment Agreement, and pursuant to the
Freeport-McMoRan Copper & Gold Inc. 2006 Stock Incentive Plan (the “Plan”),
the Executive is hereby granted effective the Grant Date 200,000 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 5(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)     Provided
the condition of Section 6 of this Agreement has been met, 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, and all securities and
property comprising all Property Distributions deposited in such Dividend
Equivalent Account with respect to such vested RSUs.

     

    2.     (a)            Provided the condition of
Section 6 of this Agreement has been met, the RSUs granted
hereunder shall vest in installments as follows:

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    
      	
              Scheduled Vesting
      Date

               

              Grant
      Date

              January
      1, 2009

              January
      1, 2010

              January
      1, 2011

              January
      1, 2012

            	
              Number of
      RSUs

               

              40,000

              40,000

              40,000

              40,000

              40,000

            

    

    

    (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 5 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 JPMorgan Chase 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)           Except
as set forth in Section 5(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 

     

    
      
        
        

      

      
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    immediately
be forfeited on the date the Participant ceases to be an Eligible Individual
(the “Termination Date”).

     

    (b)   Notwithstanding
the foregoing, and provided the condition of Section 6 of this Agreement has
been met, if the Participant ceases to be an Eligible Individual (the
“Termination”) by reason of the Participant’s death or Disability, 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.

     

    6.     The other
provisions of this Agreement notwithstanding, no unvested RSU granted hereunder
shall vest on its scheduled Vesting Date under Section 2(a) of this Agreement or
upon the Participant’s Termination pursuant to Section 5(b) of this Agreement
unless the average of the Return on Investment for the five calendar years
preceding the year in which such event occurs is at least 6% and, if required or
deemed necessary to satisfy the requirements to qualify such RSU as
“performance-based compensation” under Section 162(m), the appropriate members
of the Committee shall have certified that such condition has been
met.  Any unvested RSUs that do not vest upon the occurrence of any of
such events as a result of the failure to meet the condition of this Section 6,
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.

     

    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 One North Central
Avenue, Phoenix, Arizona, 85004, 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.

     

    
      
        
        

      

      
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    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)    “Change
in Control” shall have the meaning set forth in Article V, Section 2 of the
Employment Agreement.

     

    (b)    “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.

     

    (c)     “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
Freeport-McMoRan Copper & Gold Inc. Policies of the Committee applicable to
the 2006 Stock Incentive Plan, 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.

     

    (d)    “Managed
Net Income” shall mean, 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.

     

    (e)    “Net Cash
Provided by Operating Activities” shall mean, with respect to any year, the net
cash provided by operating activities 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.

     

    
      
        
        

      

      
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    (f)     “Net
Interest Expense” shall mean, with respect to any year, the net interest expense
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.

     

    (g)     “Return
on Investment” shall mean, with respect to any year, the result (expressed as a
percentage) calculated according to the following formula:

     

    a + (b -
c)

    d

    

    in which
“a” equals Managed Net Income for such year, “b” equals Net Interest Expense for
such year, “c” equals Tax on Net Interest Expense for such year, and “d” equals
Total Investment of Capital for such year.

    

    (h) “Tax on
Net Interest Expense” shall mean, with respect to any year, the tax on the net
interest expense of the Company and its consolidated subsidiaries for such year
calculated at the appropriate statutory income tax rate for such year as
reviewed by the Company’s independent auditors.

     

    (i) “Total
Investment of Capital” shall mean, with respect to any year, the sum of (i) the
weighted average of the stockholders’ equity in the Company and its consolidated
subsidiaries for such year, (ii) the weighted average of the minority interests
in the consolidated subsidiaries of the Company for such year, (iii) the
weighted average of the redeemable preferred stock of the Company for such year
and (iv) the weighted average of the long-term debt of the Company and its
consolidated subsidiaries for such year, all as shown in the quarterly balance
sheets of the Company and its consolidated subsidiaries for such
year.

     

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

     

    

    FREEPORT-McMoRan COPPER & GOLD
INC.

    

    

    By:
_________________________________

     

     

                                        _________________________________

                                                  
(Participant)

     

                                        _________________________________

                                                              
(Street Address)

    

                                        _________________________________

                             
(City) (State) (Zip Code)

     

    
 

    
      
         

      

      
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