Percent Addition or Reduction In Restricted Stock Units If Performance Is Below Level Defined In Agreement

[Table of Contents](#i43d04c9d26874e33802bdf64c458414a_7)percent of the target shares based on achievement of financial metrics and (ii) +/- up to 25 percent of the target shares based on FCX’s total shareholder return compared to the total shareholder return of a peer group. All of FCX’s executive officers who hold PSUs are retirement eligible, and their PSU awards are therefore non-forfeitable. As such, FCX charges the estimated fair value of the PSU awards to expense at the time the financial and operational, if applicable, metrics are established.  
FCX grants RSUs that vest over a period of three years or at the end of three years to certain employees. Some award agreements allow for participants to receive the following year’s vesting upon retirement. Therefore, on the date of grant of these RSU awards, FCX accelerates one year of amortization for retirement-eligible employees. FCX also grants RSUs to its directors, which vest on the first anniversary of the date of grant. The fair value of the RSUs is amortized over the vesting period or the period until the director becomes retirement eligible, whichever is shorter. Upon a director’s retirement, all of their unvested RSUs immediately vest. For retirement-eligible directors, the fair value of RSUs is recognized in earnings on the date of grant.  
The award agreements provide for accelerated vesting of all RSUs held by directors if there is a change of control (as defined in the award agreements) and for accelerated vesting of all RSUs held by employees if they experience a qualifying termination within one year following a change of control.  
Dividends attributable to RSUs and PSUs accrue and are paid if the award vests. A summary of outstanding stock-settled RSUs and PSUs as of December 31, 2021, and activity during the year ended December 31, 2021, follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Number of Awards |  | Weighted-Average Grant-Date Fair Value Per Award |  | AggregateIntrinsicValue |
| Balance at January 1 | 7,523,022  |  |  | $ | 16.79  |  |  |   |
| Granted | 2,121,755  |  |  | 29.15  |  |  |   |
| Vested | (1,814,976) |  |  | 15.72  |  |  |   |
| Forfeited | (28,916) |  |  | 20.29  |  |  |   |
| Balance at December 31 | 7,800,885  |  |  | 20.38  |  |  | $ | 326  |  |

  
The total fair value of stock-settled RSUs and PSUs granted was $62 million during 2021, $47 million during 2020 and $24 million during 2019. The total intrinsic value of stock-settled RSUs and PSUs vested was $56 million during 2021, $18 million during 2020 and $26 million during 2019. As of December 31, 2021, FCX had $17 million of total unrecognized compensation cost related to unvested stock-settled RSUs expected to be recognized over approximately 1.2 years.  
Cash-Settled RSUs. Cash-settled RSUs are similar to stock-settled RSUs, but are settled in cash rather than in shares of common stock. These cash-settled RSUs generally vest over three years of service. Some award agreements allow for participants to receive the following year’s vesting upon retirement. Therefore, on the date of grant of these cash-settled RSU awards, FCX accelerates one year of amortization for retirement-eligible employees. The cash-settled RSUs are classified as liability awards, and the fair value of these awards is remeasured each reporting period until the vesting dates. The award agreements for cash-settled RSUs provide for accelerated vesting upon certain qualifying terminations of employment within one year following a change of control.  
Dividends attributable to cash-settled RSUs accrue and are paid if the award vests. A summary of outstanding cash-settled RSUs as of December 31, 2021, and activity during the year ended December 31, 2021, follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Number of Awards |  | Weighted-Average Grant-Date Fair Value Per Award |  | AggregateIntrinsicValue |
| Balance at January 1 | 1,521,097  |  |  | $ | 12.92  |  |  |   |
| Granted | 308,600  |  |  | 28.00  |  |  |  |
| Vested | (753,574) |  |  | 13.94  |  |  |  |
| Forfeited | (22,199) |  |  | 15.37  |  |  |   |
| Balance at December 31 | 1,053,924  |  |  | 16.56  |  |  | $ | 44  |  |

  
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