FREEPORT MCMORAN SULPHUR INC, S-1, 1997-11-17

FREEPORT MCMORAN SULPHUR INC
S-1, 1997-11-17

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 17, 1997.

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933
--------------------------

FREEPORT-McMoRan SULPHUR INC.

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 1479 72-1392855
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation) Classification Code Number) Identification
No.)
</TABLE>

1615 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70112
(504) 582-4000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)

ROBERT M. WOHLEBER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FREEPORT-MCMORAN SULPHUR INC.
1615 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70112
(504) 582-4000

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------

COPIES TO:

ROGER T. BAKER LISA M. BUCHANAN
Vice President and General Counsel Jones, Walker, Waechter,
Freeport-McMoRan Inc. Poitevent, Carrere & Denegre, L.L.P.
1615 Poydras Street 201 St. Charles Avenue
New Orleans, Louisiana 70112 New Orleans, Louisiana 70170
(504) 582-4000 (504) 582-8000

------------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after this Registration Statement becomes effective and
all other conditions to the merger described in the prospectus included herein
have been satisfied or waived.
--------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "1933 Act"), check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the 1933 Act, please check the following box and
list the 1933 Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the 1933 Act, check the following box and list the 1933 Act registration
statement number of the earlier effective registration statement for the same
offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C>
Common Stock, $0.01 par value per share
(including Preferred Stock Purchase
Rights(1)).................................. 5,338,513 shares $0 $0(2)
</TABLE>

(1) Each share of Common Stock registered hereby includes a right under certain
circumstances to purchase one one-hundredth of a share of Participating
Preferred Stock, par value $.01 per share, of the Company.

(2) All of the shares of Common Stock registered hereby are being delivered to
the stockholders of Freeport-McMoRan Inc. ("FTX") upon consummation of the
merger of FTX with and into IMC-Global Inc. ("IGL"), as more fully described
in the prospectus included herein. Shares of common stock and warrants of
IGL that will be delivered to stockholders of FTX upon consummation of the
merger have been registered by IGL under a Registration Statement on Form
S-4 to be filed by IGL with the Securities and Exchange Commission (the
"Commission"). Because no separate consideration will be received for the
shares of Common Stock to be delivered to the FTX stockholders, the maximum
offering price is zero, and, pursuant to the 1933 Act, no fee is required to
be paid in connection with the registration of such shares.
--------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE 1933 ACT, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

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<PAGE>
PROSPECTUS

5,338,513 SHARES

[LOGO]

COMMON STOCK

$.01 PAR VALUE PER SHARE

This Prospectus relates to 5,338,513 shares of common stock (the "Common
Stock") of Freeport-McMoRan Sulphur Inc. ("Freeport Sulphur" or the "Company")
which will be delivered on a pro rata basis to the holders of common stock of
Freeport-McMoRan Inc. ("FTX"), in connection with the proposed merger (the
"Merger") of FTX into IMC Global Inc. ("IGL").

Freeport Sulphur is a newly-formed, wholly-owned subsidiary of
Freeport-McMoRan Resource Partners, Limited Partnership, a Delaware limited
partnership ("FRP"), of which FTX is the administrative managing general partner
and the owner of a 51.6% partnership interest. In connection with the Merger,
FRP has agreed to contribute to Freeport Sulphur the assets and liabilities of
FRP's sulphur business and certain of FRP's oil and gas operations, including
those businesses commonly referred to as the "Main Pass" operations, and IGL has
agreed to transfer its separate interest in the Main Pass operations to FRP,
which FRP will also contribute to Freeport Sulphur. Following those
contributions, Freeport Sulphur will own an 83.3% interest in the Main Pass
operations and will own 100% of the other assets contributed by FRP.

Following the contributions, FRP will distribute all of the shares of Common
Stock to FTX and the other holders of its units of partnership interest in
accordance with their respective partnership interests, such that, following
such distribution and immediately prior to the effective time of the Merger, FTX
will own 5,338,513, or 51.6%, of the shares of Common Stock and FRP's public
unitholders will own in the aggregate 5,008,065, or 48.4%, of the shares of
Common Stock. Upon consummation of the Merger, each FTX stockholder will then
receive a proportionate number of shares of Common Stock received by FTX from
FRP.

Under the terms of an Agreement and Plan of Merger dated August 26, 1997
between FTX and IGL (the "Merger Agreement"), and based on the approximately
25.1 million shares of FTX common stock outstanding as of the date of this
Prospectus, each FTX stockholder would be entitled to receive approximately
0.2123 of a share of Common Stock for each share of FTX common stock held (or
0.1980 of a share of Common Stock if all outstanding options to acquire FTX
common stock were exercised on or before such date). In connection with the
solicitation of the vote of the FTX stockholders and the IGL stockholders on the
Merger Agreement, FTX and IGL have delivered to their respective stockholders a
Joint Proxy Statement/Prospectus (the "Proxy Statement") describing the material
terms of the Merger, to which this Prospectus has been attached as Annex VIII.

All of the shares of Common Stock being delivered hereby are being received
by FTX from FRP and delivered to the FTX stockholders upon consummation and in
consideration of the Merger. No separate consideration will be paid by FTX
stockholders for the shares of Common Stock being delivered hereby. There is
currently no public trading market for the shares of Common Stock. Freeport
Sulphur has applied for listing of the Common Stock on the New York Stock
Exchange upon notice of issuance and expects to receive approval of such listing
prior to the distributions.

RECIPIENTS OF THE COMMON STOCK SHOULD NOTE THE FACTORS DISCUSSED IN "RISK
FACTORS" BEGINNING ON PAGE 10.

---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

--------------------------

The date of this Prospectus is November 17, 1997.

<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO, APPEARING
ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE NOTED OR THE CONTEXT REQUIRES
OTHERWISE, REFERENCES HEREIN TO THE HISTORICAL OPERATIONS AND PERFORMANCE OF THE
"COMPANY" OR "FREEPORT SULPHUR" REFER ONLY TO THE OPERATIONS AND PERFORMANCE OF
THE FRP TRANSFERRED BUSINESSES AND NOT OF THE IGL TRANSFERRED BUSINESSES, AND
PROSPECTIVE STATEMENTS ABOUT THE "COMPANY" OR "FREEPORT SULPHUR" REFER TO
FREEPORT SULPHUR AS IF EACH OF THE CONTRIBUTION AND THE DISTRIBUTIONS (AS
DEFINED BELOW) HAD BEEN CONSUMMATED.

THE MERGER AND THE DISTRIBUTIONS

This Prospectus relates to 5,338,513 shares of Common Stock of the Company
which are to be delivered on a pro rata basis to the holders of common stock,
$.01 par value, of FTX (the "FTX Common Stock") in connection with the proposed
Merger of FTX into IGL (the "FTX Stockholder Distribution"). Under the terms of
the Merger Agreement, each share of FTX Common Stock that is issued and
outstanding at the effective time of the Merger (the "Effective Time") will be
converted into the right to receive, (i) 0.90 of a share of IGL common stock,
$1.00 par value (the "IGL Common Stock"), (ii) one-third of a warrant to
purchase a share of IGL Common Stock, with each whole warrant representing a
right to purchase one share of IGL Common Stock for $44.50 per share, and (iii)
a proportionate number of shares of Common Stock that will be held by FTX
immediately prior to the Effective Time. Cash will be issued in lieu of
fractional shares and fractional warrants. Based on the approximately 25.1
million shares of FTX Common Stock outstanding as of the date of this
Prospectus, each FTX stockholder would be entitled to receive approximately
0.2123 of a share of Common Stock for each share of FTX Common Stock held at the
Effective Time (or approximately 0.1980 of a share of Common Stock if all
outstanding options to acquire FTX Common Stock were exercised on or before the
Effective Time). If all outstanding options to acquire FTX Common Stock that are
"in the money" as of the date of this Prospectus were exercised, there would be
25.9 million shares of FTX Common Stock outstanding and the exchange ratio would
be 0.2064 of a share of Common Stock for each share of FTX Common Stock.

In connection with the Merger, FRP and the Company have entered into a
Contribution and Distribution Agreement dated August 26, 1997 (the "Distribution
Agreement"), pursuant to which FRP has agreed to contribute to Freeport Sulphur
the assets and liabilities of FRP's sulphur business, and of certain of FRP's
oil and gas operations, including those businesses commonly referred to as the
"Main Pass" operations, located offshore Louisiana in the Gulf of Mexico (the
"FRP Transferred Businesses"). Also in connection with the Merger and under the
terms of a separate contribution agreement, IGL has agreed to transfer to FRP
its separate interest in the Main Pass operations (the "IGL Transferred
Businesses"), which FRP will also contribute to Freeport Sulphur. The
contributions by FRP and IGL of the FRP and IGL Transferred Businesses are
referred to herein as the "Contribution," and the assets, liabilities and
businesses so transferred are referred to collectively herein as the
"Transferred Businesses." Following the Contribution, the Company will own an
83.3% interest in the Main Pass operations (with Homestake Sulphur Company
("Homestake") continuing to own the remaining 16.7%), and will own 100% of the
other assets contributed by FRP pursuant to the Distribution Agreement.

Following the Contribution, FRP will distribute all 10,346,578 shares of the
Company's Common Stock to FTX and the other holders of its units of partnership
interest (the "FRP Distribution" and together with the FTX Stockholder
Distribution, the "Distributions") in accordance with their respective
partnership interests, such that, following the FRP Distribution and immediately
prior to the Effective Time, FTX will own 5,338,513, or 51.6%, of the
outstanding shares of Common Stock and FRP's public unitholders will own in the
aggregate 5,008,065, or 48.4%, of the outstanding shares of Common Stock. At the
Effective Time, each FTX stockholder will be entitled to receive a proportionate
number of shares of the Common Stock received by FTX in the FRP Distribution.
The FRP Distribution will not be effected until approval of the Merger by the
stockholders of FTX and IGL has been received and all other

3
<PAGE>
conditions to the Merger (other than the FRP Distribution) have been satisfied
or waived, and the FTX Stockholder Distribution will not be effected until the
FRP Distribution and the Merger have been consummated.

The 10,346,578 shares of Common Stock to be distributed to the FTX
stockholders and to the FRP public unitholders in the Distributions will
constitute all of the outstanding Common Stock immediately following the
Distributions. There is currently no public market for the Common Stock,
although it is expected that a "when-issued" trading market may develop on or
about the Effective Time. Freeport Sulphur has applied for listing of the Common
Stock on the New York Stock Exchange (the "NYSE") upon notice of issuance and
expects to receive approval of such listing prior to the Distributions. See
"Description of Capital Stock."

THE COMPANY

The Main Pass sulphur deposit, which was discovered offshore Louisiana in
the Gulf of Mexico in 1988, is the largest known sulphur reserve in North
America. The Company's Main Pass offshore mining complex is the largest
structure of its type in the Gulf of Mexico and one of the largest in the world,
and was designed to produce an average of 5,500 long tons (2,240 lbs.) per day
over its life. The Company began operating the Culberson mine in West Texas in
January 1995 following its acquisition of substantially all of the domestic
sulphur assets of Pennzoil Company ("Pennzoil"). As of December 31, 1996, the
Main Pass and Culberson mines were estimated to contain proved sulphur reserves
totaling 53.1 million long tons net to the Company (or 69.7 million long tons
net to the Company on a pro forma basis after the contribution of the IGL
Transferred Business). In addition to the Culberson mine, the Company also
acquired from Pennzoil sulphur terminals and handling facilities in Galveston,
Texas and Tampa, Florida, land and marine transportation equipment, and sales
and other related commercial contracts and obligations.

The Company's principal business is the sale of sulphur and the marketing of
its terminaling and transportation assets for use by recovered sulphur producers
and industrial consumers of sulphur. The phosphate fertilizer industry generally
accounts for approximately 90% of the Company's sulphur sales. The Company's
1996 sulphur sales were approximately 2.9 million long tons representing 25% of
domestic consumption (or 3.4 million long tons representing 30% of domestic
consumption on a pro forma basis after the contribution of the IGL Transferred
Businesses). Sales to IMC-Agrico Company, a joint venture partnership between
IGL and FRP that is a manufacturer of phosphate fertilizers and the largest
purchaser of elemental sulphur in the world, ("IMC-Agrico"), represented
approximately 65% of the Company's sulphur sales (or 71% on a pro forma basis
after the contribution of the IGL Transferred Businesses). Pursuant to a Sulphur
Supply Agreement, the Company has agreed to supply and IMC-Agrico has agreed to
purchase approximately 75% of IMC-Agrico's annual sulphur consumption for as
long as IMC-Agrico has an operational need for sulphur. The price per ton for
all sulphur delivered under the agreement is based upon the weighted average
market price for sulphur delivered by other sources to IMC-Agrico's New Wales
production plant in central Florida, except that the Company is entitled to a
premium with respect to approximately 40% of the sulphur that it delivers under
the agreement. IMC-Agrico also pays a portion of the freight costs associated
with the delivery of sulphur under the agreement. Management believes that the
terms of the Sulphur Supply Agreement are no less favorable to the Company than
those that could have been negotiated with an unaffiliated party.

4
<PAGE>

The Main Pass site also contains proved oil reserves from which the Company
produces and sells oil for the Main Pass joint venture. Oil production averaged
approximately 10,700 barrels per day (5,200 barrels net to the Company, or 7,400
barrels net to the Company on a pro forma basis after the contribution of the
IGL Transferred Businesses) during the year ended December 31, 1996, and 9,400
barrels per day (4,600 barrels net to the Company, or 6,500 barrels net the
Company on a pro forma basis after the contribution of the IGL Transferred
Businesses) during the nine months ended September 30, 1997. As of December 31,
1996, Main Pass was estimated to contain 12.8 million barrels (5.2 million
barrels net to the Company, or 7.4 million barrels net to the Company on a pro
forma basis after the contribution of the IGL Transferred Businesses) of proved
oil reserves. In 1997, such estimates were reduced to 8.2 million barrels (3.2
million barrels net to the Company, or 4.6 million barrels net to the Company on
a pro forma basis after the contribution of the IGL Transferred Businesses) of
proved oil reserves, which are expected to decline substantially in subsequent
years and to be fully depleted by 2001.

The Company's principal executive offices are located at 1615 Poydras
Street, New Orleans, Louisiana 70112, and its telephone number is (504)
582-4000.

SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES

The following summary of the material United States federal income tax
consequences of the receipt by the FTX stockholders of the Company's Common
Stock in the Merger is based on an opinion of Miller & Chevalier, Chartered, tax
counsel to FTX. This summary is qualified by, and amplified in, the discussion
in the section of this Prospectus entitled "Certain Federal Income Tax
Consequences."

FTX stockholders will receive shares of Common Stock as part of the
consideration in the Merger. Each stockholder will recognize gain, if any, but
not loss, on the Merger to the extent of the fair market value of the shares of
Common Stock (including the amount of cash received in lieu of a fractional
share interest) received in the Merger. IGL will determine the fair market value
of the Common Stock for this purpose, but its determination is not binding on
the Internal Revenue Service (the "IRS"). While not free from doubt due to the
absence of controlling precedent, gain recognized by an FTX stockholder who is
not also an IGL stockholder should constitute capital gain, rather than dividend
income, assuming that the stockholder held the FTX Common Stock with respect to
which the Common Stock is received as a capital asset. FTX stockholders who also
own IGL stock should consult their own tax advisors for special considerations
that may apply in regard to the receipt of Common Stock or cash in lieu of a
fractional share thereof. An individual stockholder's capital gain will be
taxable at a maximum federal income tax rate of 20% or 28%, if the FTX
stockholder held the surrendered shares of FTX Common Stock for more than 18
months or 12 months, respectively, as of the Effective Time.

A "Non-U.S. Holder" (as defined in "Certain Federal Income Tax
Consequences") will not be subject to United States federal income tax on any
gain realized on the receipt of Common Stock in the Merger unless (a) the gain
is derived from sources within the United States and the Non-U.S. Holder is a
nonresident alien individual who is present in the United States for 183 days or
more during the taxable year in which the gain is realized; (b) the Non-U.S.
Holder is subject to tax pursuant to the provisions of U.S. federal tax law
applicable to certain United States expatriates; (c) the gain is effectively
connected with the conduct of a trade or business within the United States; or
(d) the FTX Common Stock is a "United States real property interest" as defined
in section 897(c)(1) of the Code and at any time during the five years prior to
the Merger the Non-U.S. Holder held, directly or constructively, more than 5% of
the FTX Common Stock.

The basis of the Common Stock received by an FTX stockholder will be equal
to its fair market value as of the Effective Time. The stockholders' holding
periods for the Common Stock will begin on the day after the Effective Time.

5
<PAGE>
SUMMARY FINANCIAL AND OPERATING DATA

The summary financial data provided below reflect the historical results of
operations and financial position of the FRP Transferred Businesses only and do
not include the IGL Transferred Businesses. The historical financial information
is not necessarily indicative of the financial position and results of
operations that would have been achieved had the Company been operated as an
independent entity during the periods covered or the results that may be
achieved in the future. Historical net income and dividends per share amounts
are not presented because the FRP Transferred Businesses were operated through
divisions of FRP for the periods presented. See "Risk Factors--Limited Relevance
of Historical Financial Information."

The summary historical financial information as of December 31, 1996 and
1995 and for each of the years in the three-year period ended December 31, 1996
has been derived from the audited financial statements of the FRP Transferred
Businesses included elsewhere herein and does not include the IGL Transferred
Businesses. The summary financial information as of September 30, 1997 and for
each of the nine-month periods ended September 30, 1997 and 1996 has been
derived from the unaudited financial statements of the FRP Transferred
Businesses, and in the opinion of management includes all adjusting entries
(consisting only of normal recurring adjustments), necessary for a fair
presentation of the results of the periods presented.

The information set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the historical audited financial statements of the FRP
Transferred Businesses and notes thereto included elsewhere herein.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------------ -----------------------------------
1997 1996 1996 1995 1994
------------ --------- --------- ------------ ---------
(IN THOUSANDS, EXCEPT REALIZED PRICE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.............................. $158,304 $ 167,379 $ 221,426 $255,949 $ 151,795
Net income (loss) before income
taxes(1)............................ (425,171)(2) 11,620 12,392 25,020(3) 7,353
Pro forma net income (loss)
(unaudited)(1)...................... (269,558) 7,251 7,733 18,175 4,662
OPERATING DATA:
Sulphur sales (long tons)............. 2,167 2,142 2,900 3,050 2,088
Sulphur average realized price........ $ 60.75 $ 63.01 $ 61.78 $ 70.44 $ 53.07
Oil sales (barrels)................... 1,248 1,508 1,896 2,218 2,534
Oil average realized price............ $ 18.37 $ 18.82 $ 19.49 $ 15.82 $ 13.74
CASH FLOW DATA:
Operating............................. $ 20,834 $ 41,512 $ 51,844 $ 65,407 $ 34,202
Investing............................. (2,099) (3,743) (1,688) (3,335) (10,006)
Financing............................. (19,279) (38,560) (49,814) (59,298) (24,596)
OTHER DATA:
EBITDA(4)............................. 26,468 41,614 50,192 68,720 47,284
Capital expenditures.................. 2,989 4,948 3,834 3,710 11,231
</TABLE>

6
<PAGE>

<TABLE>
<CAPTION>
AS OF AS OF DECEMBER 31,
SEPTEMBER 30, ----------------------
1997 1996 1995
------------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Working capital......................................................... $ 27,205 $ 25,794 $ 42,059
Property, plant and equipment, net...................................... 92,562(2) 535,653 575,029
Total assets............................................................ 178,581 633,620 680,467
Net assets to be transferred............................................ 39,910 484,360 521,782
</TABLE>

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(1) As a partnership, FRP pays no federal or state income taxes and historically
has not provided for income taxes for the FRP Transferred Businesses. Pro
forma net income includes an estimated tax provision for the applicable
periods as if the FRP Transferred Businesses operated as a stand-alone
taxpaying entity.

(2) In 1995, the Financial Accounting Standards Board adopted Statement of
Financial Accounting Standards No. 121 ("SFAS No. 121"), which requires an
assessment of the carrying value of long-lived assets and a reduction of
such carrying value to fair value when events or changes in circumstances
indicate that the carrying amount may not be recoverable. In the third
quarter of 1997, FRP and FTX determined that the sulphur assets were
impaired within the meaning of SFAS No. 121 because their book value
exceeded the estimated undiscounted net cash flow recoverable with respect
thereto. Accordingly, in the third quarter of 1997, FRP and FTX recorded an
impairment writedown totaling $425.4 million to reduce these properties to
their fair value (measured by the difference between the carrying value of
such assets and the current discounted value of estimated future net cash
flows).

(3) Includes charges totaling $7.0 million allocated to the FRP Transferred
Businesses to reflect a compensation charge related to FTX stock
appreciation rights, which was attributable to the significant rise in the
price of FTX Common Stock during such period. Pursuant to a management
services agreement with FTX, these costs were allocated to FRP, and thus to
the FRP Transferred Businesses, based on payroll costs.

(4) EBITDA represents net income before income taxes plus depreciation and
amortization expense. EBITDA is not a measure of cash flow, operating
results or liquidity as determined by generally accepted accounting
principles. The Company has supplementally disclosed information concerning
EBITDA because management believes that EBITDA is commonly accepted as
providing useful information regarding a company's historical ability to
incur and service debt. Management of the Company believes that factors that
should be considered by investors in evaluating EBITDA include, but are not
limited to, trends in EBITDA as compared to cash flow from operations, debt
service requirements and capital expenditures. EBITDA as defined and
measured by the Company may not be comparable to similarly titled measures
of other companies. Further, EBITDA should not be considered in isolation or
as an alternative to, or more meaningful than, net income or cash flow
provided by operations as determined in accordance with generally accepted
accounting principles as an indicator of the Company's profitability or
liquidity.

7
<PAGE>
SUMMARY PRO FORMA FINANCIAL AND OPERATING DATA

The unaudited pro forma balance sheet data as of September 30, 1997 provided
below gives effect to the transfer of the Transferred Businesses as if such
transfer had occurred on September 30, 1997, and the unaudited pro forma income
statement data for the nine-month period ended September 30, 1997 and the year
ended December 31, 1996 gives effect to the transfer of the Transferred
Businesses as if such transfer had occurred on January 1, 1996. The unaudited
pro forma financial data does not purport to represent what the Company's
financial position or results of operations would have been had such transfer
occurred on the dates indicated or the results that may be achieved in the
future.

<TABLE>
<CAPTION>
NINE MONTHS YEAR
ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- --------------
(IN THOUSANDS, EXCEPT PER
SHARE
AND REALIZED PRICE DATA)
<S> <C> <C>
INCOME STATEMENT DATA:
Revenues.................... $ 190,510 $268,919
Net income (loss) before
income taxes(1)(2)........ (422,183) 25,326
Net income (loss)(1)........ (267,664) 15,803
Net income (loss) per
share..................... (25.76) 1.52
Weighted average common
shares.................... 10,390 10,409
OPERATING DATA:
Sulphur sales (long tons)... 2,521 3,385
Sulphur average realized
price..................... $ 61.87 $ 63.10
Oil sales (barrels)......... 1,782 2,708
Oil average realized
price..................... $ 18.37 $ 19.49
OTHER DATA:
EBITDA(3)................... $ 31,924 $ 66,326
Capital expenditures........ 4,203 5,346
</TABLE>

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30,
1997
--------------
(IN THOUSANDS)
<S> <C>
BALANCE SHEET DATA:
Working capital................................................................................. $ 43,377
Property, plant and equipment, net(2)(4)........................................................ 114,462
Total assets(2)................................................................................. 278,144
Stockholder's equity(2)......................................................................... 107,677
</TABLE>

- ------------------------

(1) As a partnership, FRP pays no federal or state income taxes and historically
has not provided for income taxes for the Transferred Businesses. Pro forma
net income includes an estimated tax provision for the applicable periods as
if the Transferred Businesses operated as a stand-alone taxpaying entity.

(2) In 1995, the Financial Accounting Standards Board adopted SFAS No. 121,
which requires an assessment of the carrying value of long-lived assets and
a reduction of such carrying value to fair value when events or changes in
circumstances indicate that the carrying amount may not be recoverable. In
the third quarter of 1997, FRP and FTX determined that the sulphur assets
were impaired within the meaning of SFAS No. 121 because their book value
exceeded the estimated undiscounted net cash flow recoverable with respect
thereto. Accordingly, in the third quarter of 1997, FRP and FTX recorded an
impairment writedown totaling $425.4 million to reduce these properties to
their fair value (measured by the difference between the carrying value of
such assets and the current discounted value of estimated future net cash
flows).

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(3) EBITDA represents net income before income taxes plus depreciation and
amortization expense. EBITDA is not a measure of cash flow, operating
results or liquidity as determined by generally accepted accounting
principles. The Company has supplementally disclosed information concerning
EBITDA because management believes that EBITDA is commonly accepted as
providing useful information regarding a company's historical ability to
incur and service debt. Management of the Company believes that factors that
should be considered by investors in evaluating EBITDA include, but are not
limited to, trends in EBITDA as compared to cash flow from operations, debt
service requirements and capital expenditures. EBITDA as defined and
measured by the Company may not be comparable to similarly titled measures
of other companies. Further, EBITDA should not be considered in isolation or
as an alternative to, or more meaningful than, net income or cash flow
provided by operations as determined in accordance with generally accepted
accounting principles as an indicator of the Company's profitability or
liquidity.

(4) The property, plant and equipment to be contributed by IGL were estimated to
have a fair value of approximately $21.9 million using the same assumptions
applied in the impairment assessment of FRP's sulphur assets discussed in
(2) above.

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RISK FACTORS

COMPETITION

There are two principal sources of elemental sulphur: (i) mined sulphur and
(ii) recovered sulphur produced as a by-product by oil refineries and gas
treatment plants. Recovered sulphur from domestic and foreign sources is a major
and lower cost source of supply for most sulphur customers and is the major
source of competition for the Company. As a by-product of the producer's
refining operations, the principal cost recognized by such producers is the cost
of handling and transportation to customers.

Production of recovered sulphur from high-sulphur gas processing plants and
oil refineries in the United States has increased at an average rate of
approximately 125,000 tons per year for the last three years. Because U.S.
recovered sulphur producers do not have the ability to store large inventories
of sulphur, they must move it to market and, depending on the proximity of their
plants to the principal sulphur market of central Florida, such producers may
enjoy a significant cost advantage over the Company.

Because the supply of U.S. recovered sulphur alone cannot meet total
domestic demand, mined sulphur, along with imported recovered sulphur obtained
principally from Canada and Mexico, are required to supply the balance. Canadian
recovered sulphur producers have facilities for storing excess sulphur
production in solid form, and approximately 90% of the Western Hemisphere's
sulphur inventories currently consist of sulphur recovered from natural gas in
the province of Alberta in western Canada. At certain price levels in the U.S.
sulphur markets, and depending on prices in the foreign markets they supply,
Canadian producers can be expected to increase sulphur sales to U. S. buyers in
competition with the Company.

The principal competitive risk to the Company's ability to mine sulphur
profitably is the potential for decreased domestic demand for sulphur, increased
production from domestic recovered sulphur producers, increases in imported
recovered sulphur and the rate at which stored sulphur, particularly in Canada,
is released into the market. In addition, the current level of Canadian sulphur
inventories limits the potential of the Company to realize significant price
increases for its sulphur. See "Business-- Competition."

RELIANCE ON IGL AS CONTINUING CUSTOMER

Approximately 65% of the Company's 1996 sulphur sales (71% on a pro forma
basis after the contribution of the IGL Transferred Businesses) were made to
IMC-Agrico, and, subsequent to the Distributions, IMC-Agrico will continue to
account for a substantial percentage of the Company's sulphur sales. Sales of
sulphur to IMC-Agrico are generally made at market prices, with a portion of
such sales receiving additional price consideration. Although the Company has a
long-term supply contract with IMC-Agrico that requires IMC-Agrico to purchase
sulphur from the Company as long as IMC-Agrico's phosphate fertilizer operations
require the use of sulphur, the loss of or a significant decline in its sales of
sulphur to IMC-Agrico could have a material adverse effect on the Company's
business and operating results.

EFFECT OF PRICES ON SULPHUR MINING OPERATIONS

Although current sulphur prices allow the Company to generate positive cash
flows from its mining operations, any significant decline in the market price of
sulphur for a sustained period would require the Company to consider the
suspension or curtailment of mining operations at either or both of its
operating mines. In such event, it is likely that the Culberson mine would be
closed first, because of the higher transportation costs associated with that
site. Because of the costs associated with closing and re-opening mine sites, as
well as the potential loss of mining or mineral development rights if mining
operations were suspended, the Company could decide to operate its mines for
some period even if they did not generate

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positive cash flow, and if operations were suspended, it could be difficult and
expensive for the Company to subsequently re-open a mine.

SEASONALITY AND VOLATILITY OF SULPHUR MARKETS

Because the principal use of sulphur is in the manufacture of phosphate
fertilizers, the Company's ability to successfully market its sulphur is
materially dependent on prevailing agricultural conditions and the worldwide
demand for fertilizers. Although phosphate fertilizer sales are fairly constant
month-to-month, seasonal increases occur in the domestic market prior to the
fall and spring planting season. Generally, domestic phosphate fertilizer sales
are at reduced levels after the spring planting season, although the decline in
domestic sales generally coincides with the time when major commercial and
governmental buyers in China, India and Pakistan purchase product for mid-year
delivery. Sales are also influenced by current and projected grain inventories
and prices, quantities of fertilizers imported to and exported from North
America, domestic fertilizer consumption and the agricultural policies of
certain foreign governments.

Like other commodities, the market and prices for sulphur have been and may
continue to be volatile. The Company's operating margins and cash flow are
subject to substantial fluctuations in response to changes in supply and demand
for sulphur, conditions in the domestic and foreign agriculture industry, market
uncertainties and other factors beyond its control.

DEPLETION OF OIL AND GAS RESERVES

Approximately 16.7% of the Company's 1996 revenues and 73.4% of its 1996 net
income were generated from the sale of oil recovered from Main Pass. Oil
revenues are expected to decline substantially in 1997 and subsequent years, and
the Company currently estimates that proved oil reserves at the Main Pass site
will be depleted by the year 2001. The Main Pass site is the Company's only oil
and gas property, and the Company currently does not intend to pursue oil and
gas exploration activities after the Main Pass reserves are depleted.

ABSENCE OF INDEPENDENT OPERATING HISTORY

In recent years the Company's operations have been conducted by FRP, FTX and
their predecessors as part of a diversified business that was partly integrated
with FRP's other business activities and not as a stand-alone business.
Following the Distributions, the Company will be an independent entity engaged,
except for the production of oil and gas at the Main Pass operations,
exclusively in the sulphur business, and neither FRP nor FTX will have any
obligation to provide financial or operational support to the Company.

LIMITED RELEVANCE OF HISTORICAL FINANCIAL INFORMATION

Because the Company has not been operated in recent years as an independent
entity, the historical financial information included herein was derived from
the audited financial statements of the FRP Transferred Businesses and is not
necessarily indicative of the results of operations, financial position and cash
flows that would have been achieved if the Company had been an independent
entity during the periods presented or that will be achieved in the future. The
Company's operations were an integral part of FRP's operations during the
periods covered by the historical financial statements included herein, and
certain historical financial data included herein has been extracted from FRP's
books and records based on allocations between FRP's sulphur and oil operations
and FRP's other businesses, and based on other assumptions necessary to reflect
the Company's operations as if they had been operated as an independent
enterprise. Additionally, the historical financial information included herein
does not give effect to the contribution of the IGL Transferred Businesses,
which is presented only on a pro forma basis. See "Pro Forma Financial
Statements (Unaudited) of Freeport-McMoRan Sulphur Inc.," including the
discussion of

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<PAGE>
the assumptions reflected therein, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

ABSENCE OF TRADING MARKET

There is currently no trading market for the Company's Common Stock and
there can be no assurance that any such market will be established or
maintained. The Company has applied for listing of the Common Stock on the NYSE.
Even if an active trading market develops for the Common Stock, there can be no
assurance that its trading volume will be adequate to assure liquidity of a
stockholder's investment.

TAXABLE RECEIPT OF FREEPORT SULPHUR COMMON STOCK

An FTX stockholder will recognize gain, if any, but not loss, realized on
the exchange of FTX Common Stock pursuant to the Merger to the extent of the
value of the Common Stock and any cash received in lieu of a fractional share of
Common Stock. While not free from doubt due to the absence of controlling
precedent, the character of the gain recognized by an FTX stockholder who is not
also an IGL stockholder arising from the receipt pursuant to the Merger of
Common Stock and any cash in lieu of a fractional share of Common Stock should
constitute capital gain, rather than dividend income, assuming that such
stockholder holds the FTX Common Stock as a capital asset. FTX stockholders who
are also stockholders of IGL should consult their tax advisors for special
considerations that may apply in regard to the receipt of Common Stock or cash
in lieu of a fractional share thereof.

DIVIDENDS

The Company intends to retain earnings to meet its working capital needs and
finance its continuing operations. Thus, the Company does not plan to pay cash
dividends to its stockholders for the foreseeable future. See "Dividend Policy."

RESERVE ESTIMATES AND FUTURE NET CASH FLOWS

The Company's reporting of proved sulphur and oil and gas reserves is based
upon engineering estimates. Reserve engineering is a subjective process of
estimating the recovery from underground accumulations of sulphur, oil and
natural gas that are not susceptible to exact measurement, and the accuracy of
any reserve estimate is a function of the quality of available data and of
engineering and geological interpretation and judgment. Estimates of
economically recoverable sulphur and oil and gas reserves and of future net cash
flows necessarily depend upon a number of variable factors and assumptions, such
as historical production from the area compared with production from other
producing areas, the assumed effects of governmental regulations and assumptions
concerning future sulphur and oil and gas prices, future operating costs,
severance and excise taxes, development costs and workover and remedial costs,
all of which may vary considerably from actual results. Because all reserve
estimates are to some degree speculative, the quantities of sulphur and oil and
natural gas that are ultimately recovered, production and operating costs, the
amount and timing of future development and reclamation expenditures, and future
sulphur and oil and natural gas sales prices may all vary materially from those
assumed in these estimates. In addition, different reserve engineers may make
different estimates of reserve quantities and cash flows based on the same data.
All of the Company's sulphur reserves are considered proved because of extensive
drilling and production experience; nevertheless, reserves are estimates and the
amount of sulphur actually produced may vary from the estimates, and such
variances could be material.

The present values of estimated future net cash flows referred to in this
Prospectus should not be construed as the current market value of the Company's
estimated proved oil and gas reserves. In accordance with applicable
requirements of the Commission, the estimated discounted future net cash flows
from proved reserves are generally based on prices and costs as of the date of
the estimate, while actual future prices and costs may be materially higher or
lower. Actual net cash flows also will be affected

12
<PAGE>
by factors such as the amount and timing of production, supply and demand for
oil and gas, curtailments or increases in consumption by gas purchasers and
changes in governmental regulations and taxation. The timing of future net cash
flows from proved reserves, and thus their actual present value, will be
affected by the timing of production and the incurrence of expenses in the
development and production of oil and gas properties. In addition, the 10%
discount factor required by the Commission to be used to calculate discounted
future net cash flows for reporting purposes is not necessarily the most
appropriate discount factor based on interest rates in effect from time to time
and risks associated with the oil and gas reserves owned by the Company or the
oil and gas industry in general.

ENVIRONMENTAL MATTERS

The Company's operations include exploration, mining, development and
production of natural resources, and the extraction, handling, production,
storage, transportation and disposal of materials and waste products that may be
toxic or hazardous. Consequently, the Company is subject to numerous
environmental laws and regulations. The Company has incurred, and expects to
continue to incur, significant capital expenditures and operating expenses based
on these laws and regulations. Continued governmental and public emphasis on
environmental issues may result in increased capital and operating costs in the
future, although the impact of future laws and regulations or future changes to
existing laws and regulations cannot be predicted or quantified.

Federal legislation (sometimes referred to as "Superfund" legislation)
imposes liability, without regard to fault, for clean-up of certain waste sites,
even though waste management activities at the site may have been performed in
compliance with regulations applicable at the time. Under the Superfund
legislation, one responsible party may be required to bear more than its
proportional share of clean-up costs if payments cannot be obtained from other
responsible parties. In addition, federal and state regulatory programs and
legislation mandate clean-up of certain wastes at operating sites. Governmental
authorities have the power to enforce compliance with these regulations and
permits, and violators are subject to civil and criminal penalties, including
fines, injunctions or both. Third parties also have the right to pursue legal
actions to enforce compliance. Liability under these laws can be significant and
unpredictable.

The Company may receive in the future notices from governmental agencies
that it is one of many potentially responsible parties at certain sites under
relevant federal and state environmental laws. Some of these sites may involve
significant clean-up costs. The ultimate settlement of liability for the
clean-up of such sites usually occurs many years after the receipt of notices
identifying potentially responsible parties because of the many complex,
technical and financial issues associated with site clean-up. The Company cannot
predict its potential liability for clean-up costs that it may incur in the
future.

The recent trend toward stricter standards in environmental legislation and
regulation is likely to continue. For instance, legislation has been proposed in
Congress from time to time that would reclassify certain crude oil and natural
gas exploration and production wastes as "hazardous wastes," which would make
the wastes subject to significantly more stringent handling, disposal and
clean-up requirements. If such legislation were to be enacted, it could have a
significant impact on the Company's operating costs, as well as the oil and gas
industry in general. Initiatives to further regulate the disposal of crude oil
and natural gas wastes are also pending in certain states and could have a
similar impact. In addition to compliance costs, government entities and other
third parties may assert substantial liabilities against owners and operators of
oil and gas properties for oil spills, discharges of hazardous materials,
remediation and clean-up costs and other environmental damages, including
damages caused by previous property owners. The imposition of any such
liabilities on the Company could have a material adverse effect on the Company's
financial condition and results of operations.

The Oil Pollution Act of 1990 imposes a variety of regulations on
"responsible parties" related to the prevention of oil spills. The
implementation of new, or the modification of existing, environmental laws or

13
<PAGE>
regulations, including regulations promulgated pursuant to the Oil Pollution Act
of 1990, could have a material adverse impact on the Company.

In connection with the Contribution, the Company has assumed responsibility
for potential liabilities, including environmental liabilities, associated with
the prior conduct of the Transferred Businesses. Among these are potential
liabilities arising from sulphur mines that were depleted and closed in the past
in accordance with reclamation and environmental laws in effect at the time,
particularly in coastal or marshland areas that have experienced subsidence or
erosion. The Company believes that it is in compliance with existing laws
regarding such closed operations, and has implemented controls in some areas
that it believes exceed its legal responsibilities. Nevertheless, it is possible
that new laws or actions by governmental agencies could result in significant
unanticipated additional reclamation costs. For additional information regarding
certain reclamation obligations, see "Business--Environmental Matters."

The Company could also be subject to potential liability for personal injury
or property damage relating to wellheads and other materials at closed mines in
coastal areas that have become exposed through coastal erosion. Although the
Company has insurance in place to protect it against certain of these
liabilities, there can be no assurance that such insurance coverage would be
sufficient. There can also be no assurance that the Company's current or future
accruals for reclamation costs will be sufficient to fully cover such costs.

OPERATING HAZARDS

The Company's offshore sulphur mining, oil production and marine
transportation operations are subject to marine perils, including collisions,
hurricanes and other adverse weather conditions. All of the Company's oil and
sulphur production activities are subject to blowouts, cratering, fires and
other risks, any of which could result in serious personal injury or death and
substantial damage to property and the environment. The Company's operations may
be subject to significant interruption, and the Company may be subject to
significant liability, due to industrial accidents, severe weather or other
natural disasters occurring at one or more of its mining operations.

The Company has in place, through FM Services Company ("FMS"), a company
that, prior to the Distributions was an affiliate of FTX and FRP and subsequent
to the Distributions will be 25% owned by the Company, certain liability,
property damage, business interruption and other insurance coverages in types
and amounts that it considers reasonable and believes to be customary in the
Company's business. This insurance provides protection against loss from some,
but not all, potential liabilities incident to the ordinary conduct of the
Company's business, including coverage for certain types of damages associated
with environmental and other liabilities that arise from sudden, unexpected and
unforeseen events, with such coverage limits, retentions, deductibles and other
features as management deems appropriate. The occurrence of an event that is not
fully covered by insurance could have a material adverse effect on the Company's
financial condition and results of operations.

DEPENDENCE ON MANAGEMENT AND ADMINISTRATIVE SERVICES

The Company depends on certain management and administrative services
provided by FMS. Pursuant to a management services agreement (the "Services
Agreement") between the Company and FMS, FMS manages and supports certain of the
Company's operations. The Services Agreement does not assure the Company
unlimited access to all of the executive officers listed under "Management," and
there may be competition between the Company and its former affiliates for the
time and effort of the employees of FMS who provide services to the Company. If
the Company were deprived of adequate access to certain key members of its
management team or other personnel, or lost access to such services altogether,
the Company's results of operations could be materially and adversely affected.
See "Certain Transactions."

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ANTI-TAKEOVER MEASURES

The Company's charter documents contain provisions that may have the effect
of discouraging a proposal for a takeover of the Company in which the Company's
stockholders could receive a substantial premium for some or all of their
shares. These provisions, among other things, authorize the issuance of "blank
check" preferred stock and divide the board of directors into three classes,
serving three-year staggered terms. The Company also intends to enter into a
Stockholder Protection Rights Agreement (the "Rights Agreement"), pursuant to
which each share of Common Stock will have an associated preferred stock
purchase right that, if triggered by the acquisition of 15% or more of the
outstanding Common Stock, would have the effect of significantly increasing the
cost to a potential acquiror of a takeover of the Company. In addition, the
Company is subject to certain provisions of Delaware law that limit, in some
cases, the ability of the Company to engage in certain business combinations
with significant stockholders. Such provisions, either alone, or in combination
with each other and the Rights Agreement, may give the Company's current
directors and executive officers a substantial ability to influence the outcome
of a proposed takeover. See "Description of Capital Stock--Certain Charter and
By-law Provisions."

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THE MERGER AND THE DISTRIBUTIONS

THE FOLLOWING DESCRIPTIONS OF THE MERGER AGREEMENT AND THE DISTRIBUTION
AGREEMENT DO NOT PURPORT TO BE COMPLETE AND ARE QUALIFIED IN THEIR ENTIRETY BY
REFERENCE TO SUCH DOCUMENTS, COPIES OF WHICH ARE ATTACHED AS ANNEX I TO THE
PROXY STATEMENT, AND AS AN EXHIBIT TO THE REGISTRATION STATEMENT OF WHICH THIS
PROSPECTUS FORMS A PART, RESPECTIVELY. ALL FTX STOCKHOLDERS ARE URGED TO READ
THE MERGER AGREEMENT AND THE DISTRIBUTION AGREEMENT IN THEIR ENTIRETY.

THE MERGER

The Common Stock being registered pursuant to the Registration Statement of
which this Prospectus forms a part is being delivered to FTX stockholders in
connection with the Merger. As more fully described in the Proxy Statement under
the caption "The Merger," at the Effective Time, FTX will be merged with and
into IGL with IGL as the surviving corporation, and each outstanding share of
FTX Common Stock (other than shares owned directly or indirectly by IGL or FTX,
which will be canceled, or shares owned by any stockholder of FTX who is
entitled to and properly exercises appraisal rights under the Delaware General
Corporation Law (the "DGCL")) will be converted into the right to receive (i)
0.90 of a share of IGL Common Stock; (ii) one-third of a warrant to purchase a
share of IGL Common Stock, with each whole warrant representing a right to
purchase one share of IGL Common Stock for $44.50 per share and (iii) a
proportionate number of shares of Common Stock that will be held by FTX
immediately prior to the Effective Time. Under the terms of the Merger
Agreement, the shares of Common Stock received by FTX in the FRP Distribution
will be delivered to holders of FTX Common Stock as of the Effective Time. See
"--The Distribution Agreement--The Distributions." FTX stockholders will receive
cash in lieu of any fractional shares of Common Stock distributable in the FTX
Stockholder Distribution.

BACKGROUND OF AND REASONS FOR THE DISTRIBUTIONS

Prior to entering into the Merger Agreement, each of FTX and IGL possessed a
significant indirect investment in IMC-Agrico, a phosphate fertilizer joint
venture, and also possessed a significant interest in the Main Pass operations,
which involve the mining and production of sulphur and the production of oil and
natural gas from deposits at the Main Pass site. During the course of
negotiating the Merger, it became apparent to FTX's management that IGL's
principal interest in pursuing the proposed Merger was in consolidating its
ownership and control of the IMC-Agrico operations, and that IGL was unlikely to
assign a value to the sulphur segment of FTX and FRP's business that would be
acceptable to FTX. As a result, FTX concluded that a better way of assuring that
the FTX stockholders would receive adequate value for the sulphur segment was to
spin off such assets to the owners of FRP including, ultimately, the
stockholders of FTX as part of the Merger consideration. For a discussion of the
background of and FTX's reasons for the Merger, see the Proxy Statement, to
which this Prospectus is attached.

THE DISTRIBUTION AGREEMENT

THE CONTRIBUTION

The Distribution Agreement provides for the transfer to the Company of
certain assets of IGL, FTX and FRP and the assumption by the Company of certain
liabilities related to those assets. The assets to be received by the Company in
the Contribution include substantially all of the assets used by FRP in the
production, marketing and distribution of sulphur, including its interest in the
Main Pass operations, as well as the oil and gas production operations at Main
Pass. Pursuant to the Merger Agreement and under the terms of a separate
contribution agreement, IGL's 25% interest in the Main Pass operations will also
be transferred to FRP, which in turn will contribute that interest to the
Company. The liabilities assumed by the Company are generally those liabilities
associated with the ownership, acquisition, conduct or past operation of the
assets received in the Contribution. See "Business."

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<PAGE>
THE DISTRIBUTIONS

The Distribution Agreement provides that the FRP Distribution will be
effected through the distribution to each holder of record of units of
partnership interests in FRP as of the close of business on the record date for
the FRP Distribution of one share of the Company's Common Stock for every 10
units of partnership interest held. In the FTX Stockholder Distribution, the FTX
stockholders of record as of the Effective Time of the Merger will receive their
pro rata share of the Common Stock received by FTX in the FRP Distribution. The
FRP Distribution will not be effected until approval of the Merger by the
stockholders of FTX and IGL has been received and all other conditions to the
Merger (other than the FRP Distribution) have been satisfied or waived, and the
FTX Stockholder Distribution will not be effected until the FRP Distribution and
the Merger have been consummated.

FRP will distribute 10,346,578 shares of Common Stock in the FRP
Distribution, of which 51.6% or 5,338,513 shares will be distributed to FTX and
48.4% or 5,008,065 shares will be distributed to the FRP public unitholders. All
of the shares of Common Stock received by FTX will be delivered to the FTX
stockholders in the FTX Stockholder Distribution. Based on the approximately
25.1 million shares of FTX Common Stock outstanding as of the date of this
Prospectus, the FTX stockholders will receive approximately 0.2123 of a share of
Common Stock for each share of FTX Common Stock held (or approximately 0.1980 of
a share of Common Stock for each share of FTX Common Stock held if all
outstanding options to purchase FTX Common Stock were exercised on or prior to
the Effective Time.) If all outstanding options to acquire FTX Common Stock that
are "in the money" as of the date of this Prospectus were exercised, there would
be 25.9 million shares of FTX Common Stock outstanding and the exchange ratio
would be 0.2064 of a share of Common Stock for each share of FTX Common Stock.
As a result of the Distributions, the FRP public unitholders and the FTX
stockholders will own all of the outstanding shares of Common Stock of the
Company.

Under the terms of the Distribution Agreement, the Distribution Agent for
each of the FRP Distribution and the FTX Stockholder Distribution will aggregate
any fractional shares of Common Stock otherwise distributable in connection with
the FRP Distribution and the FTX Stockholder Distribution, respectively, sell
them in the open market, and make a pro rata distribution of the proceeds of
such sales to FRP public unitholders or FTX stockholders, as appropriate, who
would otherwise have received a fractional share in the FRP Distribution or the
FTX Stockholder Distribution.

MUTUAL INDEMNITIES

The Distribution Agreement provides that FTX and FRP on the one hand and the
Company on the other will indemnify one another against certain losses, damages,
claims and liabilities assumed or retained by the indemnifying party. Among
other things, FTX and FRP are obligated to indemnify the Company for an
indefinite period against losses related to (i) the failure by FRP or FTX to
perform their respective obligations under the Distribution Agreement, (ii)
liabilities associated with any FRP assets not transferred to, and liabilities
not assumed by, the Company , (iii) taxes relating to the operation of the
Transferred Businesses prior to the Contribution, and (iv) the breach of any
representation or warranty by FRP or FTX contained in the Distribution
Agreement. The Company is obligated to indemnify FRP and FTX for an indefinite
period against (i) the failure by the Company to perform its obligations under
the Distribution Agreement, (ii) liabilities associated with any FRP assets
transferred to the Company pursuant to the Contribution, and liabilities
associated with the operation of the Transferred Businesses prior to the
Contribution, (iii) taxes relating to the operation of the Transferred
Businesses after the Contribution and (iv) the breach of any representation or
warranty of the Company contained in the Distribution Agreement.

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<PAGE>

THE SOLVENCY OPINION

The Company and FTX have received the opinion of Valuation Research
Corporation that the FRP Distribution does not violate certain provisions of
Delaware limited partnership law regarding the making of distributions and,
after giving effect to the Contribution and the Distributions, that the Company
(i) will be solvent after taking into account the liabilities and obligations
undertaken in connection with and as a result of the Contribution, (ii) will be
able to pay its debts and liabilities as they become due, and (iii) will not be
left with insufficient capital with which to engage in its businesses. Receipt
of this opinion is a condition precedent to the consummation of the Merger. A
copy of the opinion has been filed as an exhibit to the Registration Statement
of which this Prospectus forms a part.

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The following discussion is the opinion of Miller & Chevalier, Chartered,
tax counsel to FTX and addresses all material United States federal income tax
consequences of the receipt by the FTX stockholders of the Company's Common
Stock in the Merger. The opinion that will be rendered has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part. An
opinion of counsel is not binding on the IRS or the courts, and no assurance can
be given that the IRS will not challenge the treatment of certain matters
discussed herein or, if it does, that it will not be successful. The discussion
does not address any tax consequences of the receipt of Common Stock under
applicable state, local or foreign tax laws. The discussion is based on the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), final
and proposed Treasury regulations, administrative positions of the IRS, and
court decisions in effect on the date of this Prospectus. All of the foregoing
are subject to change, possibly with retroactive effect.

The summary is included for general information purposes only and does not
address all aspects of federal income taxation that may be relevant to a
particular stockholder in light of his or its personal tax circumstances or all
of the tax consequences that may be relevant to certain types of stockholders
subject to special treatment under the federal income tax laws (such as
individual retirement accounts, insurance companies, and tax-exempt
organizations). The summary also does not address the tax consequences to
subsequent purchasers of the Common Stock and is limited to stockholders who
will hold the Common Stock as capital assets within the meaning of section 1221
of the Code. FTX stockholders should consult their own tax advisors as to the
specific tax consequences to them of the Merger and with respect to the effects
of any state, local, or foreign tax laws to which they may be subject.

RECEIPT OF FREEPORT SULPHUR COMMON STOCK IN THE MERGER

Capital gains realized by individuals (but not corporations) are taxed at
preferential rates, while corporate (but not individual) stockholders may be
eligible for tax relief in the form of a dividends received deduction with
respect to dividends received from another corporation. While not free from
doubt due to the absence of controlling precedent, the gain recognized by an FTX
stockholder who is not also an IGL stockholder arising from the receipt of
Common Stock (and cash in lieu of a fractional share) pursuant to the Merger
should constitute capital gain, rather than dividend income, assuming that the
stockholder held the FTX Common Stock with respect to which the Common Stock is
received as a capital asset. FTX stockholders who also own IGL Common Stock
should consult their own tax advisors for special considerations that may apply
in regard to the receipt of Common Stock or cash in lieu of a fractional share
thereof. An individual stockholder's capital gain will be taxable at a maximum
federal income tax rate of 20% or 28%, if the FTX stockholder has held the
surrendered shares of FTX Common Stock for more than 18 months or 12 months,
respectively, as of the Effective Time.

The basis for the Common Stock received by an FTX stockholder will be equal
to its fair market value as of the Effective Time (determined as provided
above). The stockholders' holding periods for the Common Stock will begin on the
day after the Effective Time.

SALE OR EXCHANGE OF COMMON STOCK

In general, any gain or loss from the sale or exchange of the Common Stock
will be characterized as capital gain or loss. The gain or loss will be measured
by the difference between the amount realized on the

19
<PAGE>
sale and the stockholder's adjusted tax basis in the Common Stock. An individual
stockholder's capital gain generally will be taxed at a maximum rate of 20% if
the stockholder has owned the Common Stock for more than 18 months at the time
of the sale, or a maximum rate of 28% if the stockholder has owned the Common
Stock for more than 12 months but not more than 18 months at the time of the
sale.

TAX TREATMENT OF INCOME OR LOSS OF FREEPORT SULPHUR

The Company will be treated as a corporation for federal income tax purposes
and its income will be subject to the federal corporate income tax.

DISTRIBUTIONS FROM FREEPORT SULPHUR

Distributions of cash or other property by the Company with respect to the
Common Stock will be dividends to the extent they represent current or
accumulated earnings and profits as determined for federal income tax purposes.
To the extent that a distribution exceeds the Company's earnings and profits, it
will be treated first as a nontaxable return of capital to a stockholder and
then as capital gain if the amount exceeds the stockholder's basis in the Common
Stock. Dividends received by corporate holders may be eligible for the corporate
dividends received deduction, subject to the conditions and limitations
applicable to the deduction, and in certain circumstances may be extraordinary
dividends within the meaning of Code section 1059. Corporate stockholders should
consult their own tax advisors regarding the dividends received deduction and
extraordinary dividend rules. It should be noted, however, that the Company
intends to retain earnings to meet its working capital needs and finance its
continuing operations, and does not expect to pay dividends on its Common Stock
for the foreseeable future. See "Dividend Policy."

NON-U.S. HOLDERS

The following summary addresses certain United States federal income and
estate tax consequences of the receipt, ownership and disposition of Common
Stock by a Non-U.S. Holder. Generally, for purposes of this discussion, a
"Non-U.S. Holder" is a beneficial owner of Common Stock who or which is, for
United States federal income tax purposes, a non-resident alien individual, a
foreign corporation, a foreign partnership, or a foreign estate or trust.
Different rules apply for United States federal estate tax purposes. See
"--Federal Estate Taxes," below.

RECEIPT OF COMPANY COMMON STOCK IN THE MERGER AND SALE OR EXCHANGE OF COMMON
STOCK

A Non-U.S. Holder will not be subject to United States federal income tax on
any gain realized on the receipt of Common Stock (or cash in lieu of a
fractional share thereof) pursuant to the Merger or on the subsequent sale or
exchange of Common Stock unless (a) the gain is derived from sources within the
United States and the Non-U.S. Holder is a nonresident alien individual who is
present in the United States for 183 days or more during the taxable year in
which the gain is realized; (b) the Non-U.S. Holder is subject to tax pursuant
to the provisions of the United States federal tax law applicable to certain
United States expatriates; (c) the gain is effectively connected with the
conduct of a trade or business within the United States; or (d) the FTX Common
Stock or the Common Stock is a "United States Real Property Interest" as defined
in section 897(c)(1) of the Code and at any time during the five years prior to
the Merger or sale, the Non-U.S. Holder held, directly or constructively more
than 5 percent of the FTX Common Stock or the Common Stock, as the case may be.
The 183-day rule referred to above only applies in limited circumstances because
generally an individual present in the United States for 183 days or more in the
taxable year of the sale, exchange, or other disposition will be treated as a
resident for United States federal income tax purposes and therefore will be
subject to United States federal income tax at graduated rates applicable to
individuals who are United States persons for such purposes.

20
<PAGE>
Non-U.S. Holders should consult applicable tax treaties, which may result in
United States federal income tax treatment on the sale, exchange or other
disposition of stock different than as described above.

DIVIDENDS ON COMMON STOCK

Subject to the discussion below, dividends paid to a Non-U.S. Holder will be
subject to withholding of United States federal income tax at a rate of 30% of
the gross amount of such dividends or at such lower rate as may be specified by
an applicable tax treaty. Proposed United States Treasury Regulations were
issued on April 15, 1996 (the "Proposed Regulations"), which, if adopted, could
affect the United States taxation of dividends on Common Stock paid to a
Non-U.S. Holder by changing certain presumptions under current law and
regulations upon which the Company may generally rely in determining whether, in
the absence of documentation, a Non-U.S. Holder should be treated as qualified
for the benefits of an applicable tax treaty. Dividends received by a Non-U.S.
Holder that are effectively connected with the conduct of a United States trade
or business of the Non-U.S. Holder will be exempt from the 30% withholding tax,
but will be subject to United States federal income tax at graduated rates as if
the Non-U.S. Holder were a United States person for federal income tax purposes.
Non-U.S. Holders should consult their own tax advisors regarding the United
States federal income taxation of any dividends, including the application of
any treaties to such dividends. It should be noted, however, that the Company
intends to retain earnings to meet its working capital needs and finance its
continuing operations, and does not expect to pay dividends on its Common Stock
for the foreseeable future. See "Dividend Policy."

BACKUP WITHHOLDING TAX AND INFORMATION REPORTING

Generally, the Company must report to the IRS the amount of dividends paid,
the name and address of the recipient, and the amount, if any, of United States
federal income tax withheld. A similar report is sent to the holder. Pursuant to
tax treaties or other agreements, the IRS may make its reports available to tax
authorities in the recipient's country of residence.

Unless the Company has actual knowledge that a holder is a Non-U.S. Holder,
dividends paid to a holder of Common Stock at an address within the United
States may be subject to backup withholding at a rate of 31% if the holder is
not an "exempt recipient" as defined in existing Treasury Regulations (which
includes corporations) and fails to provide a correct taxpayer identification
number and other information to the Company. Backup withholding will generally
not apply to dividends paid to holders at an address outside the United States
(unless the Company has knowledge that the holder is a United States person for
United States federal income tax purposes).

Proceeds from a disposition of Common Stock by a Non-U.S. Holder effected by
or through a United States office of a broker will be subject to information
reporting and to backup withholding at a rate of 31% of the gross proceeds,
unless such Non-U.S. Holder certifies under penalties of perjury as to, among
other things, his or its name, address and status as a Non-U.S. Holder or
otherwise establishes an exemption. Generally, United States information
reporting and backup withholding will not apply to a payment of disposition
proceeds if the transaction is effected outside the United States by or through
a non-United States office of a broker. However, United States information
reporting requirements (but not backup withholding) will apply to a payment of
disposition proceeds where the transaction is effected outside the United States
if (a) the disposition is made by or through an office outside the United States
of a broker that is either (i) a United States person for United States federal
income tax purposes, (ii) a "controlled foreign corporation" for United States
federal income tax purposes, or (iii) a foreign person which derives 50% or more
of its gross income for certain periods from the conduct of a United States
trade or business and (b) the broker fails to maintain documentary evidence in
its files that the holder is a Non-U.S. Holder and that certain other conditions
are met or that the holder otherwise is entitled to an exemption.

21
<PAGE>
The Proposed Regulations would, if adopted, alter the foregoing rules in
certain respects. Among other things, the Proposed Regulations would provide
certain presumptions and other rules under which Non-U.S. Holders may be subject
to backup withholding in the absence of required certifications and would revise
the definition of an "exempt recipient" in the case of a corporation.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to 31% backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of United States federal
income taxes, a refund may be obtained, provided that the required information
is furnished to the IRS.

FEDERAL ESTATE TAXES

An individual Non-U.S. Holder who is treated as the owner of Common Stock at
the time of his death, or has made certain lifetime transfers of an interest in
Common Stock, will be required to include the value of such Common Stock in his
gross estate for United States federal estate tax purposes and may be subject to
United States federal estate tax, unless an applicable treaty provides
otherwise. For United States federal estate tax purposes, a "Non-U.S. Holder" is
an individual who is neither a citizen nor a domiciliary of the United States.
Whether an individual is considered a "domiciliary" of the United States for
federal estate tax purposes is generally determined on the basis of all of the
facts and circumstances.

22
<PAGE>
DIVIDEND POLICY

The Company currently intends to retain its earnings to meet its working
capital requirements and finance its business operations and does not plan to
pay cash dividends to its stockholders for the foreseeable future. Any future
determination to pay cash dividends will be made by the Board of Directors in
light of Company's earnings, cash flow, financial position, capital
requirements, credit agreements and such other factors as the Board of Directors
deems relevant at that time.

DISTRIBUTING SECURITY HOLDER

All of the shares of Common Stock being delivered hereby have been received
by FTX in the FRP Distribution and are being distributed to FTX stockholders in
the FTX Stockholder Distribution in accordance with the terms of the Merger
Agreement. No cash consideration is being paid by FTX stockholders in connection
with the FTX Stockholder Distribution and neither the Company nor FTX will
receive any proceeds from the FTX Stockholder Distribution.

CAPITALIZATION

The following table sets forth the unaudited pro forma capitalization of the
Company as of September 30, 1997, after giving effect to the transactions
described in the "Pro Forma Financial Statements (Unaudited) of Freeport-McMoRan
Sulphur Inc." included elsewhere herein. The table set forth below should be
read in conjunction with the Financial Statements of the FRP Transferred
Businesses and the notes thereto, the "Pro Forma Financial Statements
(Unaudited) of Freeport-McMoRan Sulphur Inc.," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
PRO FORMA
------------------
(IN THOUSANDS)
<S> <C>
Long-term debt, less current maturities....................................................... $ 0
--------
Stockholders' equity:

Preferred Stock, no par value per share, 50,000,000 shares authorized; none issued or
outstanding............................................................................. --

Common Stock, $0.01 par value per share, 100,000,000 shares authorized; 10,346,578 million
shares issued and outstanding........................................................... 103

Additional paid-in capital................................................................ 107,574
Total stockholders' equity............................................................ 107,677
--------
Total capitalization.......................................................................... $ 107,677
--------
--------
</TABLE>

23
<PAGE>
SELECTED FINANCIAL AND OPERATING DATA

The selected financial data provided below reflect the historical results of
operations and financial position of the FRP Transferred Businesses only and do
not include the IGL Transferred Businesses. The historical financial information
is not necessarily indicative of the financial position and results of
operations that would have been achieved had the Company been operated as an
independent entity during the periods covered or the results that may be
achieved in the future. Historical net income and dividend per share amounts are
not presented because the FRP Transferred Businesses were operated through
divisions of FRP for the periods presented. See "Risk Factors--Limited Relevance
of Historical Financial Information."

The following selected financial data as of December 31, 1996 and 1995 and
for each of the years in the three-year period ended December 31, 1996 has been
derived from the audited financial statements of the FRP Transferred Businesses
and does not include the IGL Transferred Businesses. The selected financial data
as of December 31, 1994, 1993 and 1992 and for each of the years in the two-year
period ended December 31, 1993 are unaudited and were derived from the
accounting records of FRP. The selected financial data as of and for each of the
nine-month periods ended September 30, 1997 and 1996, have been derived from the
unaudited financial statements of the FRP Transferred Businesses, and in the
opinion of management includes all adjusting entries (consisting only of normal
recurring adjustments), necessary for a fair presentation of the results of the
periods presented.

The selected financial information of the FRP Transferred Businesses set
forth below should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the historical
audited financial statements of the FRP Transferred Businesses and notes thereto
included elsewhere herein.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
-------------------------- ------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
------------- ---------- ---------- ------------- ---------- ------------- ----------
(IN THOUSANDS, EXCEPT REALIZED PRICE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................... $ 158,304 $ 167,379 $ 221,426 $ 255,949 $ 151,795 $ 131,732 $ 163,852
Loss on valuation and sale
of assets................. -- -- -- -- -- (86,631) --
Net income (loss) before
income taxes(1)........... (425,171)(2) 11,620 12,392 25,020(3) 7,353 (122,253)(4) (11,641)
Pro forma net income (loss)
(unaudited)(1)............ (269,558) 7,251 7,733 18,175 4,662 (77,508) (7,380)
OPERATING DATA:
Sulphur sales (long tons)... 2,167 2,142 2,900 3,050 2,088 1,403 1,038
Sulphur average realized
price..................... $ 60.75 $ 63.01 $ 61.78 $ 70.44 $ 53.07 $ 57.28 $ 82.69
Oil sales (barrels)......... 1,248 1,508 1,896 2,218 2,534 3,443 4,884
Oil average realized
price..................... $ 18.37 $ 18.82 $ 19.49 $ 15.82 $ 13.74 $ 14.43 $ 15.91
</TABLE>

<TABLE>
<CAPTION>
AS OF SEPTEMBER
30, AS OF DECEMBER 31,
------------------ -------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital............. $ 27,205 $ 38,271 $ 25,794 $ 42,059 $ 41,590 $ 25,105 $ 18,668
Property, plant and
equipment, net............ 92,562(2) 542,454 535,653 575,029 551,916 577,491 662,878
Total assets................ 178,581 633,668 633,620 680,467 637,902 668,274 723,576
Net assets to be
transferred............... 39,910 494,842 484,360 521,782 556,060 573,303 663,238
</TABLE>

- ------------------------------

(2) In 1995, the Financial Accounting Standards Board adopted SFAS No. 121,
which requires an assessment of the carrying value of long-lived assets and
a reduction of such carrying value to fair value when events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable. In the third quarter of 1997, FRP and FTX determined that the
sulphur assets were impaired within the meaning of SFAS No. 121 because
their book value exceeded the estimated undiscounted net cash flow
recoverable with respect thereto. Accordingly, in the third quarter of 1997,
FRP and FTX recorded an impairment writedown totaling $425.4 million to
reduce these properties to their fair value (measured by the difference
between the carrying value of such assets and the current discounted value
of future net cash flows).

(4) Includes charges totaling $11.6 million for restructuring and other related
charges.

24
<PAGE>
SELECTED PRO FORMA FINANCIAL AND OPERATING DATA

The unaudited pro forma balance sheet data as of September 30, 1997 provided
below gives effect to the transfer of the Transferred Businesses, as if such
transfer had occurred on September 30, 1997, and the unaudited pro forma income
statement data for the nine-month period ended September 30, 1997 and the year
ended December 31, 1996 gives effect to the transfer of the Transferred
Businesses as if such transfer had occurred on January 1, 1996. The unaudited
pro forma financial data does not purport to represent what the Company's
financial position or results of operations would have been had such transfer
occurred on the dates indicated or the results that may be achieved in the
future.

<TABLE>
<CAPTION>
NINE MONTHS YEAR
ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
1997 1996
-------------- --------------
(IN THOUSANDS, EXCEPT PER
SHARE
AND REALIZED PRICE DATA)
<S> <C> <C>
INCOME STATEMENT DATA:
Revenues....................................................................... $ 190,510 $ 268,919
Net income (loss) before income taxes(1)(2).................................... (422,183) 25,326
Net income (loss)(1)........................................................... (267,664) 15,803
Net income (loss) per share.................................................... (25.76) 1.52
Weighted average common shares................................................. 10,390 10,409
OPERATING DATA:
Sulphur sales (long tons)...................................................... 2,521 3,385
Sulphur average realized price................................................. $ 61.87 $ 63.10
Oil sales (barrels)............................................................ 1,782 2,708
Oil average realized price..................................................... $ 18.37 $ 19.49
OTHER DATA:
EBITDA(3)...................................................................... $ 31,924 $ 66,326
Capital expenditures........................................................... 4,203 5,346
</TABLE>

- ------------------------

(2) In 1995, the Financial Accounting Standards Board adopted SFAS No. 121,
which requires an assessment of the carrying value of long-lived assets and
a reduction of such carrying value to fair value when events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable. In the third quarter of 1997, FRP and FTX determined that the
sulphur assets were impaired within the meaning of SFAS No. 121 because
their book value exceeded the estimated undiscounted net cash flow
recoverable with respect thereto. Accordingly, in the third quarter of 1997,
FRP and FTX recorded an impairment writedown totaling $425.4 million to
reduce these properties to their fair value (measured by the difference
between the carrying value of such assets and the current discounted value
of future net cash flows).

25
<PAGE>

(3) EBITDA represents net income before income taxes plus depreciation and
amortization expense. EBITDA is not a measure of cash flow, operating
results or liquidity as determined by generally accepted accounting
principles. The Company has supplementally disclosed information concerning
EBITDA because management believes that EBITDA is commonly accepted as
providing useful information regarding a company's historical ability to
incur and service debt. Management of the Company believes that factors that
should be considered by investors in evaluating EBITDA include but are not
limited to, trends in EBITDA as compared to cash flow from operations, debt
service requirements and capital expenditures. EBITDA as defined and
measured by the Company may not be comparable to similarly titled measures
of other companies. Further, EBITDA should not be considered in isolation or
as an alternative to, or more meaningful than, net income or cash flow
provided by operations as determined in accordance with generally accepted
accounting principles as an indicator of the Company's profitability or
liquidity.

26
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following Management's Discussion and Analysis of Financial Condition
and Results of Operations relates to the historical results of operations and
financial condition of the FRP Transferred Businesses only and does not include
the IGL Transferred Businesses. Such information should be read in conjunction
with the audited financial statements of the FRP Transferred Businesses and the
Pro Forma Financial Statements of Freeport-McMoRan Sulphur Inc. included
elsewhere herein. Prior to the Contribution, the Company's operations were
conducted as an integral part of FRP's operations, and certain historical
financial data has been extracted from FRP's books and records based on
allocations between the FRP Transferred Businesses and FRP's other businesses,
and based on other assumptions necessary to reflect the Company's operations as
if they had been conducted as an independent enterprise. The results of
operations described below are not necessarily indicative of the operating
results that the Company would have achieved on an independent basis or of
future operating results.

The Company's business consists of the sale of sulphur, the marketing of
logistics services, the operation of two sulphur mines and a logistics system
consisting of sulphur transportation and terminaling assets. The Company's
operations include the Main Pass mine located offshore Louisiana in the Gulf of
Mexico, the Culberson mine located in west Texas, five sulphur terminals located
across the Gulf Coast, and marine and rail transportation assets. The oil
operations consist of FRP's interest in the Main Pass operations.

IMPAIRMENT ASSESSMENT OF SULPHUR ASSETS

In 1995, the Financial Accounting Standards Board ("FASB") issued SFAS 121
which requires an assessment of the carrying value of long-lived assets and a
reduction of such carrying value to fair value when events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable. As a result of its most recent review of its sulphur assets, FRP
and FTX concluded that the carrying value of the Main Pass sulphur assets
exceeded the undiscounted estimated future net cash flows, such that an
impairment writedown of $416.4 million (based on September 30, 1997 book values)
was required. A similar analysis of the Culberson mine sulphur assets, based on
a reassessment of recoverable reserves utilizing recent production history, also
indicated that a writedown of $9.0 million (based on September 30, 1997 book
values) was required. Fair values were estimated using discounted estimated
future net cash flows related to these assets. The writedowns to fair value were
recorded by FRP and FTX in the third quarter of 1997 and are reflected in the
unaudited September 30, 1997 financial statements as additional depreciation and
amortization charges. Future operating results of the Company will reflect lower
depreciation and amortization expense as a result of these writedowns.

27
<PAGE>
RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------------------- -------------------------------------------
1997 1996 1996 1995 1994
--------------- ------------ ------------ --------------- ------------
(DOLLARS IN MILLIONS, EXCEPT REALIZED PRICES)
<S> <C> <C> <C> <C> <C>
Revenues............................ $ 158.3 $ 167.4 $ 221.4 $ 255.9 $ 151.8
Net income (loss)................... (425.2)(1) 11.6 12.4 25.0(2) 7.4
Sulphur sales (long tons)........... 2,167,000 2,141,800 2,900,000 3,049,700 2,087,800
Sulphur average realized price per
ton................................ $ 60.75 $ 63.01 $ 61.78 $ 70.44 $ 53.07
Oil sales (barrels)................. 1,247,600 1,507,500 1,895,500 2,217,600 2,533,700
Oil average realized price per
barrel............................. $ 18.37 $ 18.82 $ 19.49 $ 15.82 $ 13.74
</TABLE>

- ------------------------

(1) Includes charges totaling $425.4 million for asset impairments.

(2) Includes charges totaling $7.0 million allocated to the FRP Transferred
Businesses to reflect a compensation charge related to FTX stock
appreciation rights, which was attributable to the significant rise in the
price of FTX Common Stock during such period. Pursuant to a management
services agreement with FTX, these costs were allocated to FRP, and thus to
the FRP Transferred Businesses, based on payroll costs.

------------------------

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 1996

Sulphur operations reported a net loss of $429.2 million in the nine-month
1997 period compared with net income of $4.7 million for the 1996 period,
primarily because of the asset impairment charges and lower sulphur prices.
Sulphur realized prices for the 1997 period were 4% lower than the 1996 period.
Sulphur sales volumes for 1997 rose slightly from the 1996 period, primarily due
to increased sales to IMC-Agrico. Production levels at the Main Pass and
Culberson sulphur mines were reduced in early 1996 in response to lower domestic
demand for sulphur, and these mines continue to operate at curtailed levels.
Higher sales volumes in 1997 were met through inventory reductions and recovered
sulphur purchases. Combined production from the two mines averaged 7,600 tons
per day for the nine-month 1997 period compared with 8,000 tons per day for the
1996 period.

Main Pass net income from oil and gas operations totaled $4.0 million in
1997 and $8.2 million in 1996 reflecting slightly lower average realizations and
reduced production levels. Current estimates are that the proved oil reserves at
the Main Pass site will be depleted by the year 2001.

Production and delivery costs were higher in the 1997 period because of
higher sulphur sales volumes, energy costs and drilling costs. Depreciation and
amortization in the nine-month 1997 period includes the asset impairment
charges, but without the charges was lower compared with the 1996 period because
of the lower production rates. General and administrative expenses were lower in
the 1997 period compared with the 1996 period.

1996 COMPARED WITH 1995

Sulphur net income totaled $3.3 million for 1996 compared with $23.0 million
for 1995 primarily because of lower prices and volumes and slightly higher unit
costs. Sulphur sales volumes for 1996 were 5% lower than the 1995 level.
Production levels at the Main Pass and Culberson mines were reduced in early
1996 in response to lower domestic sulphur sales to U.S. phosphate fertilizer
producers. Production averaged 7,800 tons per day for 1996 compared with 8,500
tons per day in 1995. Sulphur market prices were 12% lower than the 1995 period,
reflecting lower demand from the phosphate fertilizer industry and

28
<PAGE>
higher recovered sulphur supplies. Unit production costs for 1996 rose slightly
from 1995 levels because of the reduced production levels and increased energy
costs.

Main Pass oil net income for 1996 totaled $9.1 million compared with $2.0
million for 1995. Despite lower sales volumes, net income benefited in 1996 from
a significant increase in average realizations caused by the overall rise in
world oil prices which occurred in mid-1996 and again in late 1996. Lower
production for 1996 reflected declining reservoir production levels.

Production and delivery and depreciation and amortization costs were lower
in 1996 because of the reduced production levels. General and administrative
expenses were lower in 1996 primarily because of a $7.0 million charge ($5.2
million to sulphur operations and $1.8 million to oil operations) that was
allocated to the FRP Transferred Businesses to reflect a compensation charge
related to FTX stock appreciation rights, which was attributable to the
significant rise in the price of FTX Common Stock during such period. Pursuant
to a management services agreement with FTX, these costs were allocated to FRP,
and thus to the FRP Transferred Businesses, based on payroll costs.

1995 COMPARED WITH 1994

Sulphur net income totaled $23.0 million for 1995 compared with $4.3 million
for 1994. Sales increased by 46% due to the Company's acquisition in January
1995 of substantially all of Pennzoil's sulphur assets, including sales
contracts for approximately 900,000 long tons per year, and to the strengthening
in sulphur prices during 1995. Main Pass unit production costs for 1995 were
virtually unchanged from 1994.

Main Pass oil net income was $2.0 million in 1995 compared with $3.1 million
in 1994. Lower production in 1995 was offset by higher average realized prices.

Production and delivery and depreciation and amortization costs were higher
in 1995 primarily because of the Company's acquisition of Pennzoil's sulphur
assets in January 1995. General and administrative expenses were higher in 1995
primarily because of the FTX stock appreciation rights charges discussed above
and the Pennzoil acquisition.

CAPITAL RESOURCES AND LIQUIDITY

Net cash provided by operating activities totaled $20.8 million for the
nine-month 1997 period, $41.5 million for the nine-month 1996 period, $51.8
million for 1996, $65.4 million for 1995 and $34.2 million for 1994. Lower net
income and increased working capital requirements resulted in lower net cash
provided by operating activities in the nine-month 1997 period compared with the
nine-month 1996 period. Net cash provided by operating activities in 1996 was
lower than in 1995 primarily because of lower net income. Net cash provided by
operating activities in 1995 was $31.2 million higher than in 1994 primarily
because of higher net income and lower reclamation and shutdown expenditures.

Capital expenditures primarily relate to maintaining current levels of
production. Capital expenditures totaled $3.0 million for the nine-month 1997
period, $4.9 million for the nine-month 1996 period, $3.8 million for 1996, $3.7
million for 1995 and $11.2 million for 1994. Higher capital expenditures in 1994
related to drilling additional development wells at the Main Pass oil
operations. Proceeds from asset sales included certain warehousing and supply
assets of $0.9 million in the nine-month 1997 period, $1.2 million in the
nine-month 1996 period and $2.1 million in 1996 mostly from the sale of certain
marine assets, and $1.2 million from the sale of an airplane and certain marine
assets in 1994. Capital expenditures for 1997 are expected to be slightly higher
compared with 1996 and 1995 because of additional drilling activities scheduled
in 1997 to maintain required levels of water treatment capacity for the sulphur
operations. Funding for capital expenditures is provided by operating cash
flows.

Based on current projections, management believes that the Company will
generate sufficient cash flow from operations to fund its ongoing working
capital requirements, reclamation costs and projected

29
<PAGE>
capital expenditures for the foreseeable future. Additionally, the Company is in
discussions with various banks and expects to establish a revolving credit
facility to further enhance its liquidity and financial flexibility.

ENVIRONMENTAL

The Company, through its predecessors, has a history of commitment to
environmental responsibility. Since the 1940s, long before public attention
focused on the importance of maintaining environmental quality, the Company has
conducted pre-operational, bioassay, marine ecological and other environmental
surveys to ensure the environmental compatibility of its operations. The
Company's environmental policy commits its operations to compliance with local,
state and federal laws and regulations, and prescribes the use of periodic
environmental audits of all facilities to evaluate compliance status and
communicate that information to management. The Company has access to
environmental specialists who have developed and implemented corporate-wide
environmental programs. The Company continues to study methods to reduce
discharges and emissions.

Federal legislation (sometimes referred to as "Superfund" legislation)
requires payments for cleanup of certain waste sites, even though waste
management activities were performed in compliance with regulations applicable
at the time. Under the Superfund legislation, one party may, under certain
circumstances, be required to bear more than its proportional share of cleanup
costs at a site where it has responsibility pursuant to the legislation, if
payments cannot be obtained from other responsible parties. Other legislation
mandates cleanup of certain wastes at operating sites. States also have
regulatory programs that can mandate waste cleanup. Liability under these laws
involves inherent uncertainties.

Estimated future expenditures to restore properties and related facilities
to a condition that complies with environmental and other regulations are
accrued over the life of the properties. The future expenditures are estimated
based on current costs, laws and regulations. As of September 30, 1997, the
Company had accrued $45.6 million ($17.0 million of which will be reimbursed by
third parties) for abandonment and restoration of its non-operating sulphur
assets and $8.1 million for the dismantling of the Main Pass oil operations.
Current liabilities include $11.5 million at September 30, 1997 for reclamation
and mine shutdown, $2.5 million of which will be reimbursed by third parties.
The Company's share of abandonment and restoration costs for its two operating
sulphur mines is estimated to total approximately $50 million, $18.8 million of
which had been accrued at September 30, 1997, with essentially all such costs
expected to be incurred after mine closure. These estimates are by their nature
imprecise and can be expected to be revised over time because of changes in
government regulations, operations, technology and inflation.

The Company has made, and will continue to make, expenditures at its
operations for protection of the environment. Continued government and public
emphasis on environmental issues can be expected to result in increased future
investments for environmental controls, which will be charged against income
from future operations. Present and future environmental laws and regulations
applicable to current operations may require substantial capital expenditures
and may affect its operations in other ways that cannot now be accurately
predicted.

The Company maintains insurance coverage in amounts deemed prudent for
certain types of damages associated with environmental liabilities that arise
from sudden, unexpected and unforeseen events.

CAUTIONARY STATEMENT

This Prospectus contains forward-looking statements regarding the Company's
business strategy, reserve expectations, demand for sulphur, competition, the
availability of financing, the ability to satisfy future cash obligations, and
environmental costs. Important factors that might cause future results to differ
from these projections include the reliance on IGL and FRP as continuing
customers, the seasonality and volatility of sulphur markets, competition, and
environmental issues as described in more detail under "Risk Factors."

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<PAGE>
BUSINESS

GENERAL

Freeport Sulphur is a Delaware corporation formed in August 1997 to succeed
to the sulphur and certain oil and gas operations of FRP. Management believes
that Freeport Sulphur is the world's largest producer of mined, or "Frasch,"
sulphur and the largest supplier of elemental sulphur in the United States.
Pursuant to the Distribution Agreement, FRP will contribute to Freeport Sulphur
all of its sulphur operations, and certain of its oil and gas operations,
including FRP's 58.3% interest in the Main Pass operations and its sulphur mine
in Culberson County, Texas. In addition, in connection with the Merger, IGL will
transfer to FRP, which in turn will contribute to Freeport Sulphur, IGL's 25%
interest in the Main Pass operations, with the result that the Company will have
an 83.3% interest in the Main Pass operations, and Homestake will continue to
own the remaining 16.7% interest. The Company also will continue to serve as the
operator of the Main Pass operations. The Company's sulphur operations include
the mining, purchase, transportation, terminaling and marketing of sulphur. Its
oil and gas operations consist of the production and sale of oil and gas from
its Main Pass facilities.

Sulphur, both in its elemental form and in the form of sulphuric acid, is
essential to agriculture and industry. Sulphur is a base element primarily used
in the production of sulphuric acid, which is used in the manufacture of
phosphate fertilizers and other agricultural chemicals, and has numerous
industrial applications, including ore and metal leaching, petroleum and mineral
refining, and chemical manufacturing. While sulphur is essential in almost every
segment of the economy, it is generally used as a processing agent and is seldom
apparent in the final product.

Freeport Sulphur is the successor to a line of business that has been
conducted by FRP and its predecessors since 1912, making it the longest
continuously operating sulphur company in the United States. Since its founding,
the Company has introduced numerous innovations in the production and
transportation of sulphur, including the development of a mine in marsh terrain
near the mouth of the Mississippi River, the use of directional drilling (a
critical technique for exploiting offshore sulphur deposits), and the
development of technology for transporting molten sulphur, which has earned the
acceptance of U.S. sulphur consumers as an environmentally and economically
superior method. Freeport Sulphur was the first, and remains the only, company
to superheat seawater for sulphur mining, and in 1960 constructed the first
offshore sulphur mine, followed by a second offshore mine constructed in 1968,
and a third offshore mine with the construction of the Main Pass mine in 1992.
Freeport Sulphur remains the only company to successfully operate offshore
sulphur mines. Over its history, the Company has mined more than 160,000,000
long tons of sulphur, and in 1988 discovered the largest sulphur deposit in
North America at Main Pass in the Gulf of Mexico. Through its 1995 acquisition
of substantially all of the sulphur assets of Pennzoil, Freeport Sulphur became
the world's largest producer of mined sulphur and a leading supplier of sulphur
to the United States market, and positioned itself as having the industry's
largest molten sulphur handling system.

The Main Pass sulphur deposit is the largest known sulphur reserve in North
America. The Company's Main Pass offshore mining complex is the largest
structure of its type in the Gulf of Mexico and one of the largest in the world,
and was designed to produce an average of 5,500 long tons per day over its life.
The Company began operating the Culberson mine in January 1995 following its
acquisition of substantially all of Pennzoil's domestic sulphur assets. As of
December 31, 1996, the Main Pass and Culberson mines were estimated to contain
proved sulphur reserves totaling 53.1 million long tons net to the Company (or
69.7 million long tons net to the Company on a pro forma basis after the
contribution of the IGL Transferred Businesses). In addition to the Culberson
mine, the Company also acquired from Pennzoil sulphur terminals and handling
facilities in Galveston, Texas and Tampa, Florida, land and marine
transportation equipment, and sales and other related commercial contracts and
obligations.

The Company's principal business is the sale of sulphur and the marketing of
its terminaling and transportation assets for use by recovered sulphur producers
and industrial consumers of sulphur. The

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<PAGE>

phosphate fertilizer industry generally accounts for approximately 90% of the
Company's sulphur sales. The Company's 1996 sulphur sales were approximately 2.9
million long tons, representing 25% of domestic consumption (or 3.4 million long
tons, representing 30% of domestic consumption, on a pro forma basis after the
contribution of the IGL Transferred Businesses). Sales to IMC-Agrico, a
manufacturer of phosphate fertilizers and the largest purchaser of elemental
sulphur in the world, represented approximately 65% of the Company's sulphur
sales (or 71% on a pro forma basis after the contribution of the IGL Transferred
Businesses). Pursuant to a Sulphur Supply Agreement, the Company has agreed to
supply and IMC-Agrico has agreed to purchase approximately 75% of IMC-Agrico's
annual sulphur consumption for as long as IMC-Agrico has an operational need for
sulphur. The price per ton for all sulphur delivered under the agreement is
based upon the weighted average market price for sulphur delivered by other
sources to IMC-Agrico's New Wales production plant in central Florida, except
that the Company is entitled to a premium with respect to approximately 40% of
the sulphur that it delivers under the agreement. IMC-Agrico also pays a portion
of the freight costs associated with the delivery of sulphur under the
agreement. Management believes that the terms of the Sulphur Supply Agreement
are no less favorable to the Company than those that could have been negotiated
with an unaffiliated party.

The Company operates the largest molten sulphur handling system in North
America and has the capacity to transport and terminal over five million long
tons of molten sulphur annually. The Company uses this system both to support
the movement of its own mined and purchased sulphur and as a service that it
markets to recovered sulphur producers and industrial consumers.

Freeport Sulphur is a major purchaser of recovered sulphur, which is sulphur
recovered from the refining of sour natural gas and sour crude oil, purchasing
almost one million tons per year. Approximately 30% of the Company's 1996
sulphur sales were supplied from its recovered sulphur purchases. Substantially
all of the sulphur purchased by the Company, along with the sulphur produced at
the Main Pass and Culberson mines, is sold by the Company to industrial
companies for use in the manufacture of sulphuric acid.

The Main Pass operations also contain proved oil reserves from which the
Company produces and sells oil for the Main Pass joint venture. Oil production
averaged approximately 10,700 barrels per day (5,200 barrels net to the Company,
or 7,400 barrels net to the Company on a pro forma basis after the contribution
of the IGL Transferred Businesses) during the year ended December 31, 1996, and
9,400 barrels per day (4,600 barrels net to the Company, or 6,500 barrels net
the Company on a pro forma basis after the contribution of the IGL Transferred
Businesses) during the nine months ended September 30, 1997. As of December 31,
1996, Main Pass was estimated to contain 12.8 million barrels (5.2 million
barrels net to the Company, or 7.4 million barrels net to the Company on a pro
forma basis after the contribution of the IGL Transferred Businesses) of proved
oil reserves. In 1997, such estimates were reduced to 8.2 million barrels (3.2
million barrels net to the Company, or 4.6 million barrels net to the Company on
a pro forma basis after the contribution of the IGL Transferred Businesses) of
proved oil reserves, which are expected to decline substantially in subsequent
years and to be fully depleted by 2001.

STRATEGY

The Company's strategy is to utilize its extensive production facilities and
its transportation and other logistical capabilities to maintain its leadership
position in the U.S. sulphur market and to capitalize on new marketing
opportunities that are expected to develop from projected increases in global
phosphate fertilizer demand and other uses of sulphur. In addition, the Company
may expand its third party transportation and terminaling services business and
seek opportunities to increase its recovered sulphur marketing activities.

The Company is also evaluating related business opportunities including the
possible construction and operation of sulphur recovery and sulphuric acid
plants for third parties. The Company believes it can market its operational,
technological and marketing expertise to other industrial concerns, and enter
into

32
<PAGE>
strategic alliances with enterprises having complementary expertise and shared
growth objectives. The Company also plans to seek opportunities to expand its
business in technologies related to its current Main Pass oil operations such as
sour crude oil processing for others in the Gulf of Mexico region, and the
application of its seawater heating technology to such uses as secondary oil
recovery.

Freeport Sulphur's future sulphur sales volumes and realizations will
continue to depend on the level of demand from the phosphate fertilizer industry
and the availability of competing supplies from recovered sulphur producers.
Accordingly, the Company continually evaluates its sulphur business strategy in
light of competitive factors and the dynamics of the sulphur market, including
the possibility of adjusting overall production levels to match changes in
market fundamentals.

With respect to the Company's oil business, the Company does not currently
intend to pursue oil operations that are not related to Main Pass.

SULPHUR BUSINESS

SOURCES AND USES OF SULPHUR

Sulphur is present in many areas of the world and its production is
generally classified into three categories: elemental, pyrites and sulphur in
other forms ("SOF"). Elemental sulphur represents over two-thirds of worldwide
supplies of sulphur in all forms. Its sources include sulphur mined by the
Frasch process from underground deposits and recovered sulphur. The remaining
one-third of worldwide sulphur is in the form of pyrites (metal sulphides) and
SOF, with the most significant source being sulphuric acid recovered as a
by-product from the smelting of non-ferrous metals. In the United States, mined
elemental sulphur is principally found in the caprock that covers salt domes in
the coastal areas of the Gulf of Mexico and in strata-bound deposits in West
Texas. Recovered elemental sulphur is produced from the processing of natural
gas that contains hydrogen sulfide and from the refining of sour (high sulphur
content) crude oil. Recovered sulphur is the largest source of sulphur in the
world, representing approximately 85% of global production of elemental sulphur.

Worldwide, over 56 million long tons of sulphur are consumed annually, of
which over 90% is converted to sulphuric acid. The remainder is used in
elemental form in fertilizer applications, chemical manufacturing and other
applications. While sulphur is essential in almost every segment of the economy,
it is generally used as a processing agent and is seldom apparent in the final
product.

Sulphur is used primarily in the manufacture of phosphate fertilizer, with
over 60% of worldwide sulphur consumption being used for this purpose. Sulphur
is burned to form sulphuric acid, which is then used to convert phosphate rock
to phosphoric acid, the base material for the manufacture of phosphate
fertilizer. Approximately 0.4 of a long ton of sulphur is required to produce
one short ton of diammonium phosphate fertilizer, the principal form of
phosphate fertilizer. Although the Company is highly dependent on the phosphate
fertilizer market, management believes that the overall strength of the
phosphate fertilizer market and the resulting demand for sulphuric acid should
support production at current levels for the immediate future. Industry studies
indicate that world demand for phosphate fertilizer, driven by anticipated
population growth, increases in levels of grain consumption and other factors,
will exceed production capacities in the next several years. This has led to
plans to construct new capacity and feasibility studies evaluating the expansion
of existing capacity and the addition of new capacity for the manufacture of
phosphate fertilizer.

Sulphur is itself an important plant nutrient, along with nitrogen,
phosphorous and potassium. In 1996, 9.0 million tons of sulphur were applied to
soils worldwide through fertilizer application. Sulphur is also a key raw
material in the manufacture of many fungicides and other agricultural chemicals.
The Sulphur Institute estimates the current annual worldwide plant nutrient
sulphur deficit at 8.2 million tons and the outlook is for increasing
deficiencies, thus making the use of sulphur as a fertilizer a developing and
growing market.

33
<PAGE>
In addition to its agricultural applications, sulphur (usually in the form
of sulphuric acid) is essential to the manufacturing processes of
pharmaceuticals, paper, chemicals, paint, steel, petroleum and other products.
Sulphuric acid is also used in the manufacture of detergents and animal feed.
There is a growing demand for sulphur in the form of sulphuric acid for ore
leaching by the non-ferrous metals industry mainly due to advancements in
solvent extraction-electrowinning technology (SX/EW). This advancement has
allowed the development of oxide ore bodies that previously were not considered
commercially exploitable.

SULPHUR MINE OPERATIONS

OVERVIEW. Although sulphur is one of the most common elements in the
earth's crust, discoveries of elemental sulphur in quantities that can be mined
economically are rare. The Company is currently mining two such deposits, the
Main Pass mine offshore Louisiana in the Gulf of Mexico and the Culberson mine
in West Texas. The Company's sulphur discovery at Main Pass in 1988 was the
first major sulphur discovery in North America in over 25 years. The Main Pass
and Culberson mines utilize the Frasch mining process, which involves drilling
wells and injecting superheated water into the underground sulphur deposit to
melt solid sulphur, which is then recovered in liquid form. The Company has used
the Frasch process for more than 80 years, and has developed technology using
superheated seawater in the Frasch process, thereby enhancing offshore mining.

THE FRASCH PROCESS. The sulphur deposits at the Company's Culberson and
Main Pass mines are located approximately 400 and 2,000 feet underground,
respectively. Sulphur production wells are drilled into sulphur bearing
formations by rotary drilling rigs employing a directional drilling technique
that permits drilling from the well platform at angles of up to 85 DEG. from
vertical, allowing sulphur within a radius of more than 3,700 feet to be mined
from a single platform. In addition to production wells, pressure control wells
must also be drilled to recover excess water from the underground formation and
to facilitate water flow. The Frasch process used by the Company permits cost
efficient extraction of sulphur from these underground deposits. Superheated
water and compressed air are forced separately through concentric pipes towards
the sulphur deposit where the heated water liquefies the sulphur and the
compressed air helps lift the molten sulphur to the surface. The Frasch process
was developed in the 1890s and Freeport Sulphur was only the second company to
use this technology. The Company has also developed proprietary technology that
enables it to use seawater in the Frasch process without experiencing the
corrosion and scaling that otherwise would affect the heat exchangers and
pipelines. Frasch mining of sulphur deposits at locations where large quantities
of fresh water are unavailable, such as Main Pass, would not be commercially
viable without these techniques.

Natural gas and water are the two resources essential to the Frasch process.
Natural gas is used to fire steam boilers that produce the superheated water
necessary for sulphur liquefaction. The Company's mine operations currently
consume approximately nine billion cubic feet of natural gas annually. The
Company is dependent on others for the supply of natural gas, but has never
experienced difficulty in obtaining the required supply of natural gas because
it has long-term supply agreements in place with prices tied to market indices.
At Main Pass, where the Company consumes the majority of its natural gas
requirements, gas is supplied by a single supplier, but the Company has access
to a large multiple-supplier pipeline should its primary supplier have
difficulties in delivering its requirements. At the Culberson mine and the Port
Sulphur terminal, natural gas is provided by multiple suppliers. In its Main
Pass operations the Company also supplements its natural gas needs with the gas
that is produced in conjunction with its Main Pass oil operations, which is
provided to the sulphur mining operations in exchange for electricity used by
the oil operations. In the event of a national shortage of natural gas,
curtailment may be imposed by federal authorities and may interfere with the
mining process, but the Company believes that the risk of such curtailment
during the anticipated life of the mines is remote. Moreover, if necessary, the
boilers can also operate on fuel oil. The availability of water for the Main
Pass mine is not a factor for the Company because of its ability to use
seawater.

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[PICTURE]

DIAGRAMMATIC SKETCH OF A SALT DOME SULPHUR DEPOSIT

THE MINES. The Main Pass deposit was discovered by the Company in 1988. The
mine currently has the highest production rate of any sulphur mine in the world
and contains the largest known Frasch sulphur reserve in North America. The free
sulphur in the Main Pass deposit exists in the porous limestone that is part of
the caprock covering a salt dome. The Main Pass offshore complex, which is more
than a mile in length, is one of the largest structures of its type in the world
and is the largest in the Gulf of Mexico. The Main Pass mine was designed to
produce an average of 5,500 long tons per day over its life and has two sulphur
storage tanks with a combined capacity of 24,000 long tons. The facility, which
has housing capacity for 240 persons, is located in 210 feet of water and is
designed to withstand hurricane force conditions. In the event of a major storm
in the Gulf, personnel would be evacuated, but the mine is designed to remain in
operation through a communications link to Freeport Sulphur's corporate office
in New Orleans. During the year ended December 31, 1996, sulphur production at
Main Pass averaged approximately 5,350 long tons per day. All Main Pass sulphur
is transported to the Company's terminal in Port Sulphur, Louisiana in 7,500-ton
self-propelled tankers. The Company receives a fee from Homestake for operating
the Main Pass mine and for processing, transporting and marketing Homestake's
share of the Main Pass sulphur. At December 31, 1996, the Main Pass deposit was
estimated to contain proved sulphur reserves totaling 66.2 million long tons
(38.6 million long tons net to the Company, or 55.1 million long tons net to the
Company on a pro forma basis after the contribution of the IGL Transferred
Businesses). Production from the Main Pass mine is subject to a royalty of 12.5%
of net mine revenues that is payable to the U.S. Department of Interior-Minerals
Management Services (the "MMS").

The Company began operating the Culberson mine, which is located in West
Texas south of the New Mexico border, in January 1995 after acquiring the mine
from Pennzoil. The Culberson mine's free sulphur is part of a strata-bound
orebody located in the Upper Permian and Salado formations. For the year ended
December 31, 1996, production at the Culberson mine averaged approximately 2,450
long tons per day. A unique feature of the Culberson mine is a continuous water
re-injection system, through which water recovered from pressure control wells
is reheated and re-injected into the production wells. This recycling system
results in significant cost savings. Once mined, the liquid sulphur is stored in
on-site tanks with a combined capacity of 45,000 long tons until it is shipped
to the Company's Galveston terminal by a Company-owned 95-car unit train that
averages 8,400 long tons of liquid sulphur per trip. At December 31, 1996, the
Culberson mine was estimated to contain proved sulphur reserves totaling 14.5
million long tons. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Impairment Assessment of Sulphur Assets."
Production from the Culberson mine is subject to a royalty of 9% of net mine
revenues that is payable to the State of Texas and several private land owners
through a unitization agreement.

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<PAGE>

The agreement pursuant to which the Company obtained the Culberson mine
requires the Company to make quarterly payments to Pennzoil, based on a unit
volume payment multiplied by an assumed volume of sulphur, both of which are
determined by the average market price of sulphur during the quarter. The
Company is obligated to make these payments irrespective of whether the
Culberson mine is operational. The payments terminate upon the earlier of
January 2015 or the quarter in which the cumulative assumed volume of production
exceeds 18.6 million long tons. Under this arrangement, the Company paid
Pennzoil $2 million and $1.5 million for fiscal 1996 and the first nine months
of 1997, respectively.

The Company has the right, exercisable on January 1, 1999 (the "First Option
Date") and each subsequent third anniversary of the First Option Date, to
terminate its obligation to make further quarterly installment payments in
exchange for a lump sum payment of $65 million less a cumulative inflation
adjustment on the date such right is exercised, but in no event less than $10
million. If the Company does not exercise its right on any option date, Pennzoil
may, within a defined time period after each option date, require the Company to
make a single payment of $10 million in exchange for relinquishing its rights to
receive any further payments under the agreement.

The Company also has rights to sulphur deposits at its Caminada Mine,
located eight miles from Grand Isle in the Gulf of Mexico, which the Company is
not currently mining. The Company is maintaining its lease rights to the
remaining sulphur reserves under a "suspension of production" issued by the MMS.
The Company estimates that the Caminada mine has approximately 1.8 million long
tons of recoverable proved sulphur reserves remaining.

SULPHUR RESERVES. The table below sets forth the Company's portion of the
proved developed reserves for the Company's two sulphur mines.

<TABLE>
<CAPTION>
LONG TONS AT
SEPTEMBER 30,
PROVED DEVELOPED RESERVES(1) 1997(2)
- ------------------------------------------------------------------------ --------------------

<S> <C>
Main Pass 37.8 million(3)
Culberson 7.8 million
</TABLE>

- ------------------------

(1) All sulphur reserves are considered proved because of the Company's
extensive drilling and production experience.

(2) Reserves represent long tons (2,240 lbs.) of sulphur that are expected to be
recovered from the host formation. Long tons of sulphur are calculated in
place and a recovery factor, based on the percentage of residual sulphur
expected to be left behind, is applied to calculate the total estimated
recoverable tons.

(3) Or 54.0 million long tons on a pro forma basis after the contribution of the
IGL Transferred Businesses.

------------------------

SULPHUR PURCHASES

The Company is a major purchaser of recovered sulphur in the United States
and management expects its sulphur purchasing program, which is currently
averaging almost one million long tons per year, to increase and become a more
significant component of the Company's business. The Company purchases recovered
sulphur principally from oil refineries located along the lower Mississippi
River and in the Louisiana and Texas Gulf Coast regions, and from gas processing
plants in southern Mississippi.

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<PAGE>
The Company's recovered sulphur purchase program provides it with a source
of sulphur that is as important as the production from its mines in enabling the
Company to meet its sales contract commitments. Approximately 30% of the
Company's 1996 sulphur sales volume was supplied through recovered sulphur
purchases. The Company believes that its position as a leading sulphur supplier
in the domestic market, coupled with its extensive sulphur handling
capabilities, would allow it to replace any curtailed mine production with
purchased recovered sulphur at price levels that would maintain the Company's
profitability; however there can be no assurance that it will be able to do so.

SULPHUR HANDLING OPERATIONS

OVERVIEW. The Company operates the largest molten sulphur handling system
in North America and has the capacity to transport and terminal over five
million long tons of molten sulphur annually. The Company uses this system both
to support the movement of its own mined and purchased sulphur, and as a service
that it markets to recovered sulphur producers and industrial consumers. The
Company believes that the integration of the sulphur handling business with its
production, purchasing and marketing operations gives the Company a synergistic
competitive advantage over other suppliers of similar services.

MARINE TRANSPORTATION. The Company operates two molten sulphur tankers,
each having a capacity of approximately 25,000 tons. The two tankers have the
combined capacity to transport 3.5 million long tons of sulphur per year across
the Gulf of Mexico, which are loaded at the Company's Galveston and Port Sulphur
terminals and delivered to its Tampa terminals. The Company's inland barge
system is capable of transporting over one million tons annually. Each of the
Company's barges has a capacity of approximately 2,500 long tons and serves the
Texas, Louisiana and Mississippi Gulf Coast regions and the lower Mississippi
River. Two 7,500-ton tankers are used to transport sulphur from the Main Pass
mine's offshore production platform and can also be used in Gulf Coast service
to transport sulphur from the Company's terminals to its customers.

LAND TRANSPORTATION. The Company operates a rail car fleet of more than 500
cars, including a 95-car unit train that transports sulphur from the Culberson
mine to the Galveston terminal for loading onto the Company's tankers for
shipment to its Tampa terminals. The Company also makes other rail movements in
connection with transporting sulphur directly to customers' plants. The Company
also transports approximately 500,000 tons of molten sulphur per year through a
third party trucking service used primarily to serve the Galveston, Texas, lower
Mississippi River and Pensacola, Florida areas.

TERMINALS. The Company owns and operates five sulphur terminals in the
United States, the largest of which is located at Port Sulphur, Louisiana. The
Port Sulphur facility is a combined liquid storage tank farm and stockpile area
for solid sulphur. Liquid sulphur is stored in steam-heated, insulated tanks
having an aggregate capacity of approximately 110,000 long tons. The solid
storage area can hold approximately 1.3 million long tons of solid sulphur.
Because substantially all of the Company's domestic customers consume sulphur in
liquid form, the Company delivers all of its production in liquid form. This
reduces the need to remelt the sulphur, conserves energy and reduces costs, and
is an environmentally superior handling method. Sulphur can be solidified for
long-term storage to maintain inventory reserves. The Company owns a high
capacity sulphur melter that permits the conversion of solid sulphur into liquid
sulphur to supplement mine production during periods of high demand and to cover
shortfalls in mine production or in recovered sulphur purchases. Sulphur is
transported from Port Sulphur by barge to customers' plants in Louisiana on the
lower Mississippi River or along the Gulf Coast of Texas and Mississippi, or by
tanker to the Company's terminals in Tampa.

The Company's other terminals are located in Tampa and Pensacola, Florida
and Galveston, Texas. There are two Tampa terminals, each of which has a liquid
storage capacity of 90,000 long tons and is supplied with sulphur from Port
Sulphur and Galveston by the Company's sulphur tankers. Each of the Tampa
facilities ships molten sulphur to phosphate fertilizer producers in central
Florida by tank truck. The Pensacola terminal has a storage capacity of 10,000
long tons and is used for the storage, handling and

37
<PAGE>
shipping of recovered sulphur purchases or transporting recovered sulphur for
third parties. Molten sulphur is shipped by barge from the Pensacola terminal to
either the Port Sulphur terminal or directly to lower Mississippi River
customers.

The Galveston terminal was acquired from Pennzoil in 1995 and has five
15,000-long ton liquid storage tanks and solid storage capacity of one million
long tons. This terminal receives sulphur from the Company's Culberson mine by
unit train, and recovered sulphur purchases by truck, barge or rail, and then
ships sulphur to local customers by truck or barge or to the Tampa terminals by
tanker. The Galveston terminal also has the ability to load solid sulphur aboard
large oceangoing vessels, giving the Company access to international markets
should market conditions favor sulphur exports.

SULPHUR SALES

Substantially all of the Company's sulphur is sold to the phosphate
fertilizer industry for the manufacture of sulphuric acid, which is used to
produce phosphoric acid, a base chemical used in the production of phosphate
fertilizers. Typically, the phosphate fertilizer industry accounts for
approximately 90% of the Company's total sulphur sales. Freeport Sulphur's
domestic shipments to its five largest customers represented 91% of total
shipments in 1996, 89% in 1995 and 94% in 1994. The majority of the Company's
sulphur supply contracts, with the exception of its contract with IMC-Agrico
discussed below, are for a term of one year or longer and generally call for the
repricing of sulphur on a quarterly or six-month basis.

The Company also processes, transports, and markets Homestake's share of
production at the Main Pass mine for a fee. In addition to supplying the
domestic sulphur market and providing transportation and terminaling services
for others, Freeport Sulphur maintains the capability of marketing sulphur
internationally should market conditions favor export sales.

Sales to IMC-Agrico, a manufacturer of phosphate fertilizers and the largest
purchaser of elemental sulphur in the world, represented approximately 65% of
the Company's sulphur sales (or 71% on a pro forma basis after the contribution
of the IGL Transferred Businesses) and 54% of its total revenues (or 57% on a
pro forma basis after the contribution of the IGL Transferred Businesses) during
1996. Pursuant to a Sulphur Supply Agreement, the Company has agreed to supply
and IMC-Agrico has agreed to purchase approximately 75% of IMC-Agrico's annual
sulphur consumption for as long as IMC-Agrico has an operational need for
sulphur. The price per ton for all sulphur delivered under the agreement is
based upon the weighted average market price for sulphur delivered by other
sources to IMC-Agrico's New Wales production plant in central Florida, except
that the Company is entitled to a premium with respect to approximately 40% of
the sulphur that it delivers under the agreement. IMC-Agrico also pays a portion
of the freight costs associated with the delivery of sulphur under the
agreement. Management believes that the terms of the Sulphur Supply Agreement
are no less favorable to the Company than those that could have been negotiated
with an unaffiliated party.

Revenues from the Company's sulphur sales depend significantly on production
levels of phosphate fertilizer, the availability of sulphur that is recovered
from high-sulphur oil and natural gas refining and the rate at which stored
surpluses, particularly in Canada, are released into the market and depleted.
Improved phosphate consumption rates, coupled with reduced imports and curtailed
mine production, stabilized sulphur prices beginning in mid-year 1996 and
continuing into the first-half of 1997. However, current prices are
substantially weaker than the high levels of the early 1990's, primarily because
of economic and political changes in Eastern Europe and the former Soviet Union,
which led to the closure of plants consuming in excess of seven million tons of
sulphur per year. To the extent that current United States phosphate fertilizer
production remains strong, sustained sulphur demand is expected to continue;
however, the current level of Canadian sulphur inventories limits the potential
for significant price increases. See "Competition."

38
<PAGE>
OIL AND GAS BUSINESS

OVERVIEW

The Main Pass site also contains oil and natural gas reserves located within
the same caprock reservoir that contains the sulphur reserves. The Company's
estimate of proved recoverable oil reserves at Main Pass at December 31, 1996
was 12.8 million barrels (5.2 million barrels net to the Company or 7.4 million
barrels net to the Company on a pro forma basis after the contribution of the
IGL Transferred Businesses). After 1996 such estimates were reduced to 8.2
million barrels (3.2 million barrels net to the Company, or 4.6 million barrels
net to the Company on a pro forma basis after the contribution of the IGL
Transferred Businesses) due to adjustments made by the Company to the 1996
reserve estimate to account for production during the first half of fiscal 1997
and because certain reserves are no longer believed to be recoverable based on
updated geologic information. No credit was taken in this adjustment for
possible offsetting increases in reserves based on recent production history,
but some offset additions may be possible when Ryder Scott Company performs a
review of the reserves at the end of fiscal 1997. The Main Pass oil reserves are
expected to decline substantially in subsequent years and to be fully depleted
by 2001, and the Company does not intend to pursue oil and gas exploration
operations that are not related to Main Pass.

RESERVES AND ACREAGE

For information relating to estimates of the Company's net interests in
proved oil reserves as of December 31, 1996, and for supplementary information
relating to estimates of discounted future net cash flows from proved oil
reserves, and changes in such estimates, reference is made to the audited
financial statements of the FRP Transferred Businesses, included elsewhere
herein.

At various times, the Company is required to report estimates of oil
reserves to various governmental authorities. The basis for reporting estimates
of reserves to these authorities may not be comparable to the reserves presented
herein because of differences in the times at which such estimates are made and
variances in reserve and other definitions of the particular governmental
authority. Generally, however, the reserves data used for these governmental
reports is computed from the same reserve information base as reported herein.

The Company's interest in Main Pass, which is located in federal waters
offshore Louisiana, constitutes the only oil and gas producing property owned by
Freeport Sulphur. The property consists of 1,125 gross acres and is fully
developed within the meaning of governmental reporting requirements.

The Company possesses a leasehold interest in its Main Pass oil property
that is maintained by production and will remain in effect until production and
drilling and development operations cease. The Company believes that the lease
terms are sufficient to allow for reasonable development of the reserves and
that it has satisfactory title to such property.

PRODUCTION

Recoverable hydrocarbons at Main Pass are located in the upper portion of
the same caprock that hosts the sulphur reserves and in an overlying layer of
sand. The limestone caprock reservoir and the overlying sand are in fluid
contact with each other, share a common oil and gas composition and have the
same pressure characteristics. Oil production commenced in the fourth quarter of
1991 with cumulative total production as of September 30, 1997 totaling 34.1
million barrels. Oil production has been enhanced by the injection of
superheated water in the sulphur mining operations, which both lowers oil
viscosity, allowing it to flow more freely, and maintains reservoir pressure,
thereby enhancing recovery. Any associated gas that is produced with the oil is
provided to the sulphur mining operation in exchange for electricity used in the
oil operations. The co-development of the sulphur and oil reserves has yielded
significant operating synergies and efficiencies.

39
<PAGE>

The purchase agreement pursuant to which the Company obtained the rights to
the Main Pass oil lease obligates the Company under certain circumstances to
make an annual production payment to Chevron U.S.A. Inc. The payment amount is
based on the amount of annual oil production at the Main Pass site and the
amount by which the average annual price of oil exceeds certain specified prices
during the term of the contract. If the average annual price of oil does not
exceed the specified prices, no payment is due. No payments were made for fiscal
1996 or the first nine months of 1997 in connection with this obligation. This
payment obligation will convert to a royalty right on behalf of Chevron upon the
occurrence of certain events that the Company anticipates will occur in the
first half of 1998. Under this royalty right, Chevron will be entitled to
receive 25% of revenues (less transportation costs) of oil and gas production
after the first to occur of (i) cumulative oil production at the Main Pass site
in excess of 36 million barrels or (ii) 20 years from the date of first oil
production (November 6, 1991); provided that this 25% overriding royalty is
limited to 50% of net profit realized on oil production.

OIL SALES

Oil prices have historically exhibited, and can be expected to continue to
exhibit, volatility as a result of such factors as conflicts in the Middle East,
actions by the Organization of Petroleum Exporting Countries and changes in
worldwide economic and political conditions. Since the beginning of 1997, oil
prices have fallen by approximately 25%, with some experts speculating that
prices may soften further prior to year end. The oil produced at Main Pass
contains sulphur and is generally heavier than other Gulf Coast crude oils. As a
result, it sells at a discount relative to Gulf Coast crude oils containing less
sulphur and to lighter grade crude oils.

Oil produced at the Main Pass mine is sold to two Gulf Coast refiners with
sales volumes split 72% and 28%. Both sales contracts are for a term of six
months and are priced at market for the oil's grade. AMOCO Production Company is
the Company's largest oil customer, accounting for 74% of oil revenues and 12%
of the Company's total revenues for fiscal 1996.

COMPETITION

SULPHUR

In the United States, there are two principal sources of elemental sulphur:
(i) mined sulphur produced by Freeport Sulphur and (ii) recovered sulphur
produced by more than 50 companies at more than 130 refineries and gas treatment
plants. There are four producers of mined sulphur worldwide, of which management
believes Freeport Sulphur is the largest and the only mined sulphur producer
serving the United States market. For 1996, Freeport Sulphur estimates that its
production of sulphur accounted for approximately 27% of domestic, and 6% of
world, elemental sulphur production.

The Company estimates that total domestic sulphur consumption in 1996 was
11.5 million tons, of which domestic Frasch sulphur accounted for approximately
25%, domestic recovered sulphur accounted for approximately 60%, and imported
sulphur, primarily from Canada and Mexico, accounted for approximately 14%. The
remaining 1% of domestic sulphur consumption was attributable to sulphuric acid
produced in metal smelting operations and imported sulphuric acid.

40
<PAGE>
The following table sets forth for each of the years 1994 through 1996 the
total estimated domestic sulphur consumption in tons, together with the
percentage supplied by Frasch suppliers, domestic recovered sulphur and imported
sulphur:

DOMESTIC SULPHUR CONSUMPTION

<TABLE>
<CAPTION>
TOTAL
CONSUMPTION
(MILLIONS OF FRASCH DOMESTIC PERCENTAGE
YEAR TONS) SUPPLIERS RECOVERED IMPORTED
- ------------ --------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
1996 11.5 25% 60% 14%
1995 11.7 27% 55% 17%
1994 10.9 28% 58% 13%
</TABLE>

------------------------

Recovered sulphur from domestic and foreign sources is the major source of
competition for Freeport Sulphur. Approximately 90% of the Western Hemisphere's
sulphur inventories currently consist of sulphur recovered from natural gas in
the province of Alberta in western Canada, primarily because United States
recovered sulphur suppliers do not have the ability to store large inventories
of sulphur. During the 1990s world sulphur supply has been in surplus resulting
in a build up of Canadian sulphur inventories. Canadian sulphur inventories were
estimated to be 9.8 million tons at year end 1996 and are expected to increase.

Production of recovered sulphur in the United States has increased at an
average rate of approximately 125,000 tons per year for the last three years,
and totaled approximately 7.6 million tons in 1996. High-sulphur gas processing
capacity in the U.S. is not expected to increase above current levels, but the
sulphur content of crude oil feedstocks to U.S. oil refineries is expected to
continue to increase. Although growth in U.S. recovered sulphur production is
expected to continue, the rate of growth is expected to slow, as the refining
industry is consolidating into a smaller number of large refineries, and it is
estimated that total U.S. refinery processing will not increase substantially.
Technology for recovery of sulphur from coal and oil-burning utility plants is
well advanced and this and other sources of sulphur resulting from air pollution
abatement efforts will have some impact on sulphur supplies. Industry studies
vary in their forecast of the worldwide elemental sulphur balance; however it is
widely accepted that a surplus currently exists and will continue into the
foreseeable future.

Recovered sulphur provides a major and lower cost source of supply for most
sulphur customers. The supply of U.S. recovered sulphur alone, however, cannot
satisfy total domestic demand, and mined sulphur, along with imported recovered
sulphur obtained principally from Canada and Mexico are required to supply the
balance. The principal competitive risk to the Company's ability to mine sulphur
profitably is the potential for decreased domestic demand for sulphur, increased
production from domestic recovered sulphur producers, increases in imported
recovered sulphur, and the rate at which stored sulphur, particularly in Canada,
is released into the market.

OIL

A large number of companies and individuals are engaged in the development
and production of oil. A substantial number of the companies engaged in the
development and production of oil possess financial resources considerably
greater than those of the Company.

CUSTOMERS

IMC-Agrico is the Company's single largest sulphur customer, accounting for
approximately 65% of sulphur sales and 54% of total sales for fiscal 1996 (or
71% and 57%, respectively, on a pro forma basis after the contribution of the
IGL Transferred Businesses). The Company's next four largest customers represent
approximately 25% of sulphur sales. These companies represent a mix of
industrial companies and phosphate fertilizer manufacturers.

41
<PAGE>
The oil produced from Main Pass is sold to two Gulf Coast refiners with
sales volumes split 72% and 28%. AMOCO Production Company is the largest
customer, accounting for 12% of the Company's total revenues for fiscal 1996.

ENGINEERING, RESEARCH AND DEVELOPMENT

Crescent Technology, Inc. ("Crescent") furnishes certain engineering
consulting, research and development, environmental and safety services to the
Company. Many of Crescent's employees are former employees of the Company, FTX
and other formerly related companies who formed Crescent in 1993 to provide
technical services to such companies and others on an outsourced basis. Crescent
owns and operates laboratory and pilot plant facilities at Belle Chase,
Louisiana, where minerals analysis, metallurgical work and other research and
testing are conducted, which contributes to the Company's technical operations
and commercial activities. Additionally, Crescent maintains engineering
consulting and mine development groups in New Orleans, Louisiana, which provide
the engineering consulting, environmental services and design and construction
supervision activities required to implement new ventures and apply improvements
to the Company's existing operations.

OPERATING HAZARDS

The Company's oil and gas and sulphur production activities are subject to
all of the risks normally incident to the development and production of
hydrocarbons and sulphur, including blowouts, cratering, fires and other risks,
any of which could result in serious personal injury or death and substantial
damage to property and the environment. Additionally, its offshore sulphur
mining, oil production and marine transportation operations are subject to
marine perils, including collisions, hurricanes and other adverse weather
conditions. Freeport Sulphur carries insurance for certain of these risks, with
such coverage limits, retentions, deductibles, and other features as management
deems appropriate.

REGULATORY MATTERS

The Company's mining, production and exploration activities are subject to
various federal, state and local laws governing exploration, development,
production, exports, taxes, labor standards, occupational health and safety,
toxic substances and other matters. Regulations pertaining to the environment
mandate, among other things, the maintenance of air and water quality standards,
solid and hazardous waste standards, protection of underground sources of
drinking water, and protection and regulation of wetland areas. The Company will
succeed to all licenses, permits or other authorizations obtained or held by FRP
or any of its affiliates insofar as they relate to the sulphur and Main Pass oil
and gas businesses. All licenses, permits and other authorizations currently
required of each existing operation have been obtained or timely applied for.

To comply with these federal, state and local laws, material capital and
operating expenditures on environmental projects, both with respect to
maintaining current operations and initiating new operations, may be required in
the future. The amount of such expenditures cannot be estimated at this time,
but such costs could have an adverse effect on the Company's financial condition
and results of operations. There is also a risk that more stringent laws
affecting the operation of mining companies could be enacted, and although such
regulations would affect the industry as a whole, compliance with such new
regulations could be costly.

Domestic oil operations are subject to extensive state and federal
regulation. Compliance is often burdensome, and failure to comply carries
substantial penalties. The heavy and increasing regulatory burden on the oil
industry increases the cost of doing business and consequently affects
profitability.

42
<PAGE>
ENVIRONMENTAL MATTERS

Federal laws and regulations have expanded greatly in recent years with
respect to environmental considerations. The United States Department of
Interior, the U.S. Environmental Protection Agency (the "EPA") and the Coast
Guard administer laws and regulations that impose liability upon the lessee
under a federal lease for the cost of cleanup of pollution damages. A serious
incident of pollution may also result in any one of these agencies requiring
lessees under federal leases to suspend or cease operations in the particular
area. The Company carries insurance against some, but not all, of these risks.

The Company, through its predecessors, has a history of commitment to
environmental responsibility. Since the 1940s, long before the general public
recognized the importance of maintaining environmental quality, the Company has
conducted pre-operational, bioassay, marine ecological and other environmental
surveys to ensure the environmental compatibility of its operations. The
Company's environmental policy commits its operations to compliance with
applicable laws and regulations. The Company has implemented corporate-wide
environmental programs and continues to study methods to reduce discharges and
emissions.

The largest effluent from sulphur mining operations is the pressure control
water recovered from the sulphur-bearing formation. At Main Pass, pressure
control wells remove water from the formation and discharge the water under the
terms of a National Pollutant Discharge Elimination System permit issued by the
EPA. At the Culberson mine, the pressure control water is removed from the
formation and reused in the Frasch mining process. The injection of mine water
at Culberson is authorized by an Underground Injection Control permit issued by
the EPA. Other water discharges at the two mines and five terminals are made
under permits issued by the EPA, state regulatory agencies in the States of
Texas, Louisiana or Florida, or local regulatory authorities. All of these
discharges are in substantial compliance with applicable regulations.

The Company has various other permits with respect to air emissions, solid
waste production and disposal, dredging of bottom sediment and the operation of
port facilities that facilitate its business activities. Agencies that provide
these permits and authorizations include the MMS, the U.S. Coast Guard, the
Louisiana Department of Environmental Quality, the Louisiana Department of
Natural Resources, the Texas Natural Resources Conservation Commission, and the
Florida Department of Environmental Protection. The Company believes it is in
compliance in all material respects with the terms and conditions of these
permits and does not anticipate any significant new costs to obtain new permits
or to maintain compliance with existing permits.

In connection with the Contribution, the Company has assumed responsibility
for environmental liabilities associated with the prior conduct of the
Transferred Businesses, including reclamation responsibilities at three
previously producing sulphur mines. Sulphur production was suspended at the
Company's Caminada offshore sulphur mine in 1994, and the Company will be
required to salvage the mining facilities once the remaining reserves are
produced or it becomes certain that such reserves will not be economically
recoverable. The Company's salvage expense will be shared on a 50/50 basis with
Exxon Corporation, and a reserve has been accrued for the estimated expense.

The Company's Grande Ecaille mine, which was depleted in 1978, was salvaged
in accordance with applicable regulations at the time of closure. Although the
Company has no legal obligation to do so, it has undertaken to reclaim wellheads
and other materials, none of which are classified as hazardous, that are being
exposed through coastal erosion, and it is anticipated that these reclamation
activities will continue for several more years. Additional expenditures may be
required from time to time if erosion continues, although the Company does not
expect such expenditures to be material. Additional expenditures may be
necessary in the future to remove building foundations should the Company decide
it is in the best interest of the Company to do so.

43
<PAGE>
Reclamation of the Company's two producing sulphur mines, Main Pass and
Culberson, will be required upon the closure of those facilities, and a reserve
account is being accumulated to cover this expense. The Company has also closed
nine other sulphur mines, all of which have been reclaimed in accordance with
applicable regulations and customary industry practices.

In September 1997 the Company completed the salvage of its Grand Isle mine
in the Gulf of Mexico, which was depleted in 1991, by converting it into an
artificial reef for the enhancement of marine life. The reef was constructed at
the request of the State of Louisiana as part of its "Rigs-to-Reefs" program
through which the State and private industry are cooperating to provide useful
marine habitats using offshore structures that are no longer needed for
commercial activities. The Grand Isle reef is the first in shallow water and is
the largest in the Gulf of Mexico. The reef was donated to the State of
Louisiana, which has assumed all responsibility for its upkeep, although the
Company will retain responsibility for any environmental liabilities that may
arise from previous mining activities with respect to this site.

Although the Company believes that its prior reclamation activities were
carried out in compliance with then applicable laws and regulations and that it
is accruing adequate reserves to cover future reclamation costs, no assurance
can be given that the Company will not incur materially greater reclamation
costs than those anticipated.

EMPLOYEES

As of September 30, 1997, Freeport Sulphur had 426 active employees. There
are 402 employees working at the Company's mine sites and terminals, and 24
employees located at its New Orleans headquarters. None of the employees of
Freeport Sulphur is represented by any union or covered by any collective
bargaining agreement. The Company believes its employee relations are
satisfactory.

The Company also uses contract personnel to perform many of the technical
tasks customarily conducted by Company employees at its Main Pass mine, which
minimizes development costs and allows the Company to use its management staff
to direct the efforts of both the sulphur mine and oil operations. Freeport
Sulphur also receives financial, legal and administrative and other related
services through an administrative services agreement with FMS. See "Risk
Factors--Dependence on Management and Administrative Services."

LEGAL PROCEEDINGS

The Company is involved from time to time in various legal proceedings of a
character normally incident to its businesses. The Company believes that its
potential liability in any such pending or threatened proceedings will not have
a material adverse effect on the financial condition or results of operations of
the Company. The Company, through FMS, maintains liability insurance to cover
some, but not all, potential liabilities normally incident to the ordinary
course of its businesses with such coverage limits as management deems prudent.

44
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
Company's directors (the "Directors") and executive officers (the "Executive
Officers").

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------------------------- --- -----------------------------------------------------
<S> <C> <C>
James R. Moffett.................. 59 Co-Chairman of the Board
Rene L. Latiolais................. 55 Co-Chairman of the Board
Richard C. Adkerson............... 50 Vice Chairman of the Board
Robert M. Wohleber................ 46 President, Chief Executive Officer and Director
John G. Amato..................... 53 General Counsel
J. Terrell Brown.................. 57 Director
Thomas D. Clark, Jr............... 56 Director
B. M. Rankin, Jr.................. 67 Director
</TABLE>

James R. Moffett has served as the Chairman of the Board of each of
Freeport-McMoRan Copper & Gold Inc. ("FCX") and FTX for the last five years. Mr.
Moffett has also served as Chief Executive Officer of FCX since July 1995. Mr.
Moffett is also President Commissioner of P.T. Freeport Indonesia Company
("PTFI"), an operating subsidiary of FCX, and Co-Chairman of the Board of
McMoRan Oil & Gas Co. ("MOXY"), an oil and gas exploration company.

Rene L. Latiolais has served as Vice Chairman of the Board of FCX since
1994. Since 1993 Mr. Latiolais has also served as a Commissioner of PTFI. Mr.
Latiolais currently serves as President and Chief Executive Officer of FTX and
FRP. He is also a Director of FTX. Mr. Latiolais held the office of Chief
Operating Officer of FTX until 1995, the office of Executive Vice President of
FTX until 1993, and the office of Senior Vice President of FTX from 1987 until
1992.

Richard C. Adkerson has served as President and Chief Operating Officer of
FCX since April 1997. Mr. Adkerson has also served as Chief Financial Officer of
FCX since 1994 and, prior to April 1997, served FCX as Executive Vice President.
Mr. Adkerson is also Vice Chairman of the Board of FTX, Co-Chairman of the Board
and Chief Executive Officer of MOXY and Chairman of the Board and Chief
Executive Officer of FM Properties Inc. ("FMPO"), a real estate development
company. From 1992 to 1995 Mr. Adkerson served as Senior Vice President and
Chief Financial Officer of FTX. Mr. Adkerson also serves as a Director of Hi-Lo
Automotive, Inc.

Robert M. Wohleber has served as Senior Vice President of FRP and FTX since
November 1996. From June 1994 to November 1996, Mr. Wohleber served as Vice
President of FTX. He served as Vice President and Treasurer of FTX from May 1992
to June 1994 and served as Treasurer of FTX from May 1989 to May 1992. Mr.
Wohleber was named a Senior Vice President of FCX in November 1997. He served as
a Vice President of FCX from July 1994 to November 1997, as Vice President and
Treasurer of FCX from July 1993 to June 1994, and as Treasurer of FCX from
August 1990 to June 1993.

John G. Amato has served as General Counsel of MOXY since 1994, and has also
served as the General Counsel of FMPO since 1995. Prior to August 1995, Mr.
Amato served as General Counsel of FTX and FCX. Mr. Amato currently provides
legal and business advisory services to FTX and FCX under a consulting
arrangement.

J. Terrell Brown is Chairman of the Board of Directors and Chief Executive
Officer of United Companies Financial Corporation ("United Companies"), a
provider of non-traditional consumer and mortgage lending. He is also Chairman
of the Board of Directors and Chief Executive Officer of each of United
Companies' subsidiaries. He has served as a director and executive officer of
United Companies since 1969 and was named Chief Executive Officer in 1985.

45
<PAGE>
Thomas D. Clark, Jr. has served as the Dean of E. J. Ourso College of
Business Administration at Louisiana State University since 1995 and is the
Ourso Distinguished Professor of Business. Prior to his current position, Mr.
Clark held a variety of positions at Florida State University and the Air Force
Institute of Technology, including Chairman of Information and Management
Services and Director of the Center for Information Systems Research. Mr. Clark
also serves as a director of Ocean Energy, Inc., an oil and gas exploration
company.

B. M. Rankin, Jr. is a private investor. Mr. Rankin has served as a Director
of FTX since 1981, of MOXY since 1994 and of FCX since 1995.

The Board of Directors consists of three classes, each serving a three-year
term of office, with the members of one class being elected each year. Messrs.
Brown and Latiolais are members of the class serving until the 1998 annual
meeting of stockholders, Messrs. Clark and Wohleber are members of the class
serving until the 1999 annual meeting of stockholders, and Messrs Adkerson,
Moffet and Rankin are members of the class serving until the 2000 annual meeting
of stockholders.

DIRECTOR COMPENSATION

Each Director who is not an employee of the Company will be paid an annual
director's fee of $15,000 and an attendance fee of $500 for each committee
meeting attended. All Directors will be paid an attendance fee of $1,000 for
each board meeting attended. Each Director will be reimbursed for reasonable
out-of-pocket expenses incurred in attending board and committee meetings. Each
Director who is not an employee of the Company will also be eligible to receive
options to purchase shares of Common Stock under the terms of the Director Plan
described below.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company's Board of Directors has established an Audit Committee and a
Corporate Personnel Committee (the "Compensation Committee"). The Audit
Committee is responsible for reviewing the Company's financial statements and
annual audit and meeting with the Company's independent public accountants to
review the Company's internal controls and financial management practices. The
members of the Audit Committee are Messrs. Brown, Clark and Rankin.

The Compensation Committee is responsible for recommending to the Board of
Directors compensation for the Company's key employees, including its Executive
Officers, and administering the Company's incentive plans and performing such
other similar functions as may be assigned by the Board of Directors. The
members of the Compensation Committee are Messrs. Brown and Clark.

EXECUTIVE COMPENSATION

The Company was not incorporated until August 26, 1997, and therefore did
not have any Executive Officers or employees during the year ended December 31,
1996. The future compensation and employment arrangements of the Company's
Executive Officers and employees will be determined by the Board of Directors
and the Compensation Committee.

The services of the Executive Officers who are not employed by the Company
will be provided to the Company by FMS under a management services agreement.
The Company will reimburse FMS at FMS' cost, including allocated overhead, for
such services. Such Executive Officers will be compensated exclusively by FMS
for their services to the Company. Those Executive Officers who are also
employees of FMS are eligible to participate in certain FMS employee benefit
plans and programs. The total costs to FMS for such Executive Officers,
including the costs borne by FMS with respect to such plans and programs, will
be allocated to the Company, to the extent practicable, in proportion to the
time spent by such Executive Officers on Company affairs. No other payment will
be made by the Company to FMS for providing such compensation and benefit plans
and programs to such Executive Officers.

46
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Company's Compensation Committee are Messrs. Brown and
Clark, neither of whom has ever been an officer or employee of the Company, nor
has or has had any other significant relationship with the Company. No Executive
Officer of the Company serves as a director or member of the compensation
committee of another entity, one of whose executive officers will serve as a
Director or on the Compensation Committee of the Company.

THE EMPLOYEE BENEFITS AGREEMENT

The Company, FTX and FRP have entered into the Employee Benefits Agreement
to provide for the transfer of assets and liabilities pertaining to certain
employee benefit plans maintained by FTX for the benefit of FTX employees who
have in the past provided services to FRP in connection with the FRP Transferred
Businesses and to provide for the compensation and benefits of those employees
who will become employees of the Company (the "Transferred Employees"). In
accordance with the terms of the Employee Benefits Agreement, the Company will
sponsor qualified and non-qualified defined contribution and defined benefit
pension plans that initially will have substantially the same provisions as the
FTX pension plans and will provide credit for prior FTX service. All liabilities
under the FTX pension plans with regard to the Transferred Employees will be
transferred to the Company's plans. Assets sufficient to fund the transferred
qualified plan liabilities will be transferred from the FTX plans to the
comparable Company plans, and assets sufficient to fund the transferred
non-qualified plan liabilities will be transferred from FTX to the Company.

The Company will establish new welfare benefit plans, such as medical,
dental, life insurance, disability and sick leave plans, which will credit
Transferred Employees with prior service at FTX and will credit items such as
deductibles, limits and usage of and by Transferred Employees under similar FTX
plans. FTX will pay the Company an actuarially-determined amount to cover the
costs of post-retirement medical benefits for Transferred Employees. The Company
will assume responsibility for all claims made after the Merger by Transferred
Employees on sickness, disability or other leaves of absence. FTX will retain
liability for retiree medical benefits for employees who retired prior to the
Merger, but the Company has agreed to reimburse FTX quarterly for a portion of
those expenses for former employees who provided services primarily for the
Transferred Businesses. In addition, the Company will reimburse FTX for claims
and premiums related to COBRA coverage for certain employees who lose medical
coverage as a result of the Merger and related transactions.

Pursuant to the Employee Benefits Agreement, each outstanding stock option,
stock appreciation right, and stock incentive unit relating to FTX Common Stock
that has been granted under an FTX stock option or stock incentive plan and that
is held by any person other than an employee of IGL or the IMC-Agrico joint
venture (collectively, the "FTX Awards") will be converted into an adjusted FTX
stock option, stock appreciation right, or stock incentive unit, respectively
(an "Adjusted FTX Award"), and a new non-qualified option to purchase Common
Stock (a "Company Option") under the Company's Adjusted Stock Award Plan
described below. Thus, after the FTX Stockholder Distribution, each holder of an
FTX Award will hold an Adjusted FTX Award and a Company Option. The number of
shares of FTX Common Stock subject to the Adjusted FTX Award will be the same as
the number of shares of FTX Common Stock subject to the related FTX Award, and
the number of shares of Common Stock subject to the Company Option will be the
number of shares of Common Stock that a holder of record of the number of shares
of FTX Common Stock subject to the related FTX Award would be eligible to
receive in the FTX Stockholder Distribution.

If the FTX Award that is converted contains a "tax-offset" payment right
feature, the Company Option derived from such FTX Award will relate to a number
of shares of Common Stock determined as described above multiplied by a factor
of 1.6556. No Company Option will contain a "tax-offset" payment

47
<PAGE>
right feature. Each Company Option will, however, have in-tandem "limited
rights" equal in number to the number of shares of Common Stock subject to such
Company Option.

The exercise price of each FTX Award will be allocated between the Adjusted
FTX Award and the Company Option based on the relative fair market values of FTX
Common Stock and Common Stock at the time of the Merger. Each Company Option and
each Adjusted FTX Award will have the same exercisability terms, remaining
duration and change of control provisions as the FTX Award from which it was
derived.

In connection with the Merger, each outstanding Adjusted FTX Award, whether
a stock option, stock appreciation right or stock incentive unit, will, in
effect, be converted into an IGL stock option, stock appreciation right or stock
incentive unit, respectively.

In accordance with the terms of the Employee Benefits Agreement, FTX will
calculate, as of the date of the FTX Stockholder Distribution, its liability
under various non-qualified incentive plans in respect of the deferred
compensation of the Transferred Employees. In consideration of a cash payment by
FTX to the Company in an amount equal to such accrued liability, the Company
will assume such liability in respect of the Transferred Employees. Similarly,
FTX shall determine the total amount of cash bonus payments that it would have
made to the Transferred Employees as a group under non-qualified incentive plans
for 1997, and, in consideration of a cash payment by FTX to the Company in an
amount equal thereto, the Company will assume the payment of such amounts to the
Transferred Employees as soon as feasible after 1997 in accordance with
procedures it may later establish for payment of cash incentives to its
employees.

STOCK OPTION PLANS

COMPANY ADJUSTED STOCK AWARD PLAN

The Company has adopted the Freeport-McMoRan Sulphur Inc. Adjusted Stock
Award Plan (the "Company Adjusted Stock Award Plan"). The purpose of the Company
Adjusted Stock Award Plan is to provide for the issuance of the Company Options
as described under "The Employee Benefits Agreement" above. No other awards will
be made under the Company Adjusted Stock Award Plan.

The maximum number of shares of Common Stock in respect of which stock
options may be granted under the Company Adjusted Stock Award Plan is expected
to be approximately 450,000, and will be determined in accordance with the
conversion procedures described under "The Employee Benefits Agreement" above.
No individual will be granted awards under the Company Adjusted Stock Award Plan
with respect to more than 200,000 shares of Common Stock. The shares of Common
Stock to be delivered under the Company Adjusted Stock Award Plan will be made
available from the authorized but unissued shares of Common Stock or from
treasury shares.

The Company Adjusted Stock Award Plan will be administered by the
Compensation Committee, upon which no Director who is an officer of the Company
may serve. Current and former employees, officers and directors of FTX who hold
FTX Awards at the Effective Time of the Merger are eligible to receive stock
options under the Company Adjusted Stock Award Plan. It is estimated that
approximately 180 persons will receive stock options under the Company Adjusted
Stock Award Plan pursuant to the conversion of FTX Awards described above.

Stock options granted under the Company Adjusted Stock Award Plan will have
the terms described under "The Employee Benefits Agreement" above. If the
Compensation Committee determines that any dividend or other distribution
(whether in the form of cash, securities, or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase or exchange of shares, issuance of
warrants or other rights to purchase securities of the Company, or other similar
corporate transaction or event affects the Common Stock such that an adjustment
is appropriate to prevent dilution or enlargement of the benefits intended under
the Company

48
<PAGE>
Adjusted Stock Award Plan, then the Compensation Committee has discretion to (i)
adjust the number and type of shares (or other securities or property) with
respect to which options may be granted, (ii) make equitable adjustments in the
number and kind of shares (or other securities or property) subject to
outstanding stock options and the respective exercise prices thereof and (iii)
if appropriate, provide for the payment of cash to a participant.

The Company Adjusted Stock Award Plan may be amended at any time by the
Board of Directors, except that stockholder approval will be required if
determined by the Compensation Committee to be necessary or advisable in order
to comply with any tax or regulatory requirement.

The federal income tax consequences of the stock options are described below
under "--Federal Income Tax Consequences."

The following table sets forth information with respect to the stock options
anticipated to be granted under the Company Adjusted Stock Award Plan, to (i)
each of the Executive Officers, (ii) all Executive Officers as a group, (iii)
each of the Directors who is not an Executive Officer, (iv) all Directors who
are not Executive Officers as a group and (v) all employees of the Company,
including all officers who are not Executive Officers as a group, based on the
number of FTX Awards held by each of them as of October 31, 1997 and assuming
that each share of FTX Common Stock converted in the Merger will entitle the
holder to receive 0.2123 of a share of Common Stock. No associate of any
Director or Executive Officer is anticipated to be eligible to participate in
the Company Adjusted Stock Award Plan. Other than the persons identified in the
following table, no person is anticipated to receive more than 5% of the awards
anticipated to be granted under the Company Adjusted Stock Award Plan. Each
option will be immediately exercisable in full and will have a term equal to the
remaining term of the FTX Award. Each stock option is granted in conjunction
with a limited right, the terms of which are as described under "--1997 Stock
Option Plan" below.

NEW PLAN BENEFITS UNDER THE
COMPANY ADJUSTED STOCK AWARD PLAN

<TABLE>
<CAPTION>
NUMBER OF SHARES UNDERLYING PERCENT OF TOTAL
OPTIONS ANTICIPATED TO BE OPTIONS ANTICIPATED TO
NAME AND POSITION GRANTED BE GRANTED TO EMPLOYEES
- -------------------------------------------------------- ------------------------------- -----------------------
<S> <C> <C>
James R. Moffett, Co-Chairman of the Board.............. 74,897 16.9%
Rene L. Latiolais, Co-Chairman of the Board............. 96,227 21.8%
Richard C. Adkerson, Vice Chairman of the Board......... 23,609 5.3%
Robert M. Wohleber, President, Chief Executive Officer 9,431 2.1%
and Director...........................................
John G. Amato, General Counsel.......................... 14,747 3.3%
J. Terrell Brown, Director.............................. -- --
Thomas D. Clark, Jr., Director.......................... -- --
B.M. Rankin, Jr., Director.............................. 3,711 *
Executive Officer Group................................. 218,911 49.5%
Non-Executive Officer Director Group.................... 3,711 *
Non-Executive Officer Employee Group.................... 219,615 49.7%
</TABLE>

- ------------------------

* Less than 1%.
------------------------

1997 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

The Company has adopted the Freeport-McMoran Sulphur Inc. 1997 Stock Option
Plan for Non-Employee Directors (the "Director Plan"). The purpose of the
Director Plan is to align more closely the interests of the Company's
non-employee Directors with those of the Company's stockholders by providing

49
<PAGE>
for the automatic grant of stock options to such Directors in accordance with
the terms of the Director Plan.

The maximum number of shares of Common Stock in respect of which options may
be granted under the Director Plan is 75,000. The shares of Common Stock to be
delivered under the Director Plan will be made available from the authorized but
unissued shares of Common Stock or from treasury shares.

Except for determinations with respect to the transferability of options,
which will be made by the Compensation Committee, the Director Plan will be
administered by the Board of Directors.

All Directors who are not employees of the Company or a subsidiary will be
"Eligible Directors" under the Director Plan. There will initially be three
Eligible Directors. Each Eligible Director will be granted an option to purchase
5,000 shares of Common Stock upon the Distributions and an option to purchase
1,000 shares on May 1 of each year that the Director Plan is in effect.

Options granted under the Director Plan will be non-qualified options. The
exercise price of options granted under the Director Plan will be 100% of the
fair market value of the underlying shares of Common Stock on the date of grant.
Each option becomes exercisable in 25% annual increments beginning on the first
anniversary of the date of grant, and will have a term of 10 years. Upon
termination of Board service, except in the case of death or retirement, an
option may be exercised, to the extent exercisable at the time of termination of
Board service, for a period of three months, but no later than the expiration
date of the option. Upon death or retirement from service as a Director, a
Director's options that were exercisable on the date of death or retirement or
could have become exercisable within one year after such date will remain
exercisable until the earlier of (i) in the case of death, the first anniversary
of the date of death, or in the case of retirement, the third anniversary of the
date of such retirement or (ii) the expiration date of the option. An option
will become exercisable in full upon a change of control of the Company, as
defined in the Director Plan.

The option exercise price may be satisfied in cash or by delivering shares
of Common Stock owned by the optionee.

If the Board determines that any dividend or other distribution (whether in
the form of cash, securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of shares or other securities of the
Company, issuance of warrants or other rights to purchase securities of the
Company, or other similar corporate transaction or event affects the Common
Stock such that an adjustment is appropriate to prevent dilution or enlargement
of the benefits intended under the Director Plan, then the Board has discretion
to (i) adjust the number and type of shares (or other securities or property)
with respect to which options may be granted, (ii) make equitable adjustment in
the number and kind of shares (or other securities or property) subject to
outstanding stock options and the respective exercise prices thereof and (iii)
if appropriate, provide for the payment of cash to a participant. In the event
the Company is merged or consolidated into or with another corporation in a
transaction in which the Company is not the survivor, or in the event that
substantially all of the Company's assets are sold to another entity not
affiliated with the Company, any holder of an option, whether or not then
exercisable, will be entitled to receive (unless the Company takes such
alternative action as may be necessary to preserve the economic benefit of the
option for the optionee) on the effective date of any such transaction, in
cancellation of such option, an amount in cash equal to the excess, if any, of
the fair market value on the effective date of any such transaction of the
shares underlying such option over the aggregate exercise price thereof.

The Director Plan may be amended or terminated at any time by the Board of
Directors, except that no amendment will be made without stockholder approval if
stockholder approval is deemed necessary to comply with regulatory requirements.

The federal income tax consequences of the stock options are described below
under "--Federal Income Tax Consequences."

50
<PAGE>

1997 STOCK OPTION PLAN

The Company has adopted the Freeport-McMoRan Sulphur Inc. 1997 Stock Option
Plan (the "Stock Plan"). The purpose of the Stock Plan is to motivate and reward
key personnel by giving them a proprietary interest in the Company's success.

Awards under the Stock Plan will be made by the Compensation Committee. The
Compensation Committee has full power and authority to designate participants,
set the terms of awards and to make any determinations necessary or desirable
for the administration of the Plan.

Those persons eligible to participate in the Stock Plan are: (a) officers
and key employees of the Company and its existing or future subsidiaries, (b)
officers and employees of any entity with which the Company has contracted to
receive executive, management or legal services and who provide services to the
Company or a subsidiary under such arrangement, (c) any consultant or advisor to
the Company, a subsidiary or an entity with which the Company has contracted to
receive executive, management or legal services and who provides services to the
Company or a subsidiary under such arrangement and (d) any person who has agreed
in writing to become eligible to participate within 30 days. A subsidiary is
defined as (i) a corporation or other entity in which the Company possesses
directly or indirectly equity interests representing at least 50% of the voting
power or 50% of the total value of all classes of equity interests of such
corporation or other entity and (ii) any other entity in which the Company has a
direct or indirect economic interest that is designated as a subsidiary by the
Compensation Committee. The Compensation Committee may delegate to certain
Executive Officers of the Company the power to make awards to eligible persons
who are not Executive Officers or Directors, subject to limitations to be
established by the Compensation Committee. It is anticipated that the
Compensation Committee's determinations of which eligible individuals will be
granted awards and the terms thereof will be based on each individual's present
and potential contribution to the success of the Company and its subsidiaries.
It is estimated that approximately fifty persons will be granted awards under
the Stock Plan.

The maximum number of shares of Common Stock with respect to which awards
payable in shares of Common Stock may be granted under the Stock Plan is
1,000,000, plus, to the extent authorized by the Board, the number of shares
reacquired by the Company in the open market or in private transactions for an
aggregate price no greater than the cash proceeds received by the Company from
the exercise of Stock Plan options. Grants of stock appreciation rights, limited
rights and other stock-based awards not granted in tandem with options and
payable only in cash may relate to no more than 1,000,000 shares. No individual
may receive in any year awards under the Stock Plan that relate to more than
200,000 shares of Common Stock. Shares subject to awards that are forfeited or
canceled will again be available for award. In addition, to the extent that
shares are delivered to pay the exercise price of options or are delivered or
withheld by the Company in payment of the withholding taxes relating to an award
under the Stock Plan, the number of shares withheld or delivered will again be
available for grant under the Stock Plan. The shares to be delivered under the
Stock Plan will be made available from the authorized but unissued shares of
Common Stock or from treasury shares.

Stock options, stock appreciation rights, limited rights, and other
stock-based awards may be granted under the Stock Plan in the discretion of the
Compensation Committee. Options granted under the Stock Plan may be either
non-qualified or incentive stock options. Only employees of the Company and its
subsidiaries will be eligible to receive incentive stock options. Stock
appreciation rights and limited rights may be granted in conjunction with or
unrelated to other awards and, if in conjunction with an outstanding option or
other award, may be granted at the time of such award or thereafter, at the
exercise price of such other award. The Compensation Committee has discretion to
fix the exercise price of such options at a price not less than 100% of the fair
market value of the underlying Common Stock at the time of grant thereof (or at
the time of grant of the related award in the case of a stock appreciation right
or limited right granted in conjunction with an outstanding award), except that
this limitation on the Compensation Committee's discretion does not apply in the
case of awards granted in substitution for outstanding awards previously granted
by an acquired company or a company with which the Company combines. The

51
<PAGE>
Compensation Committee has broad discretion as to the terms and conditions upon
which options and stock appreciation rights are exercisable, but under no
circumstances will an option, a stock appreciation right or a limited right have
a term exceeding 10 years.

The option exercise price may be satisfied in cash, or in the discretion of
the Compensation Committee, by exchanging Common Stock owned by the optionee or
by a combination of cash and Common Stock. The ability to pay the option
exercise price in Common Stock would permit an optionee to engage in a series of
successive stock-for-stock exercises of an option (sometimes referred to as
"pyramiding") and thereby fully exercise an option with little or no cash
investment; however, it is expected that the Compensation Committee's policy
will be to require any stock tendered in payment of the exercise price to be in
certificated form and to have been held by the exercising optionee for such time
as is sufficient to avoid any adverse accounting consequences to the Company
resulting from the permitting of stock-for-stock exercises.

Upon the exercise of a stock appreciation right with respect to Common
Stock, a participant would be entitled to receive, for each such share subject
to the right, the excess of the fair market value of such shares on the date of
exercise over the exercise price of such right. The Compensation Committee has
the authority to determine whether the value of a stock appreciation right is
paid in cash or Common Stock or a combination thereof.

Limited rights generally are exercisable only during a period beginning not
earlier than one day and ending not later than 90 days after the expiration date
of any tender offer, exchange offer or similar transaction that results in any
person or group becoming the beneficial owner of more than 40% of all classes
and series of the Company's stock outstanding, taken as a whole that have voting
rights with respect to the election of directors of the Company (not including
shares of preferred stock which may be issued in the future that have the right
to elect directors only if the Company fails to pay dividends). Upon the
exercise of a limited right granted under the Stock Plan, a participant would be
entitled to receive, for each share of Common Stock subject to such right, the
excess, if any, of the highest price paid in or in connection with such
transaction over the grant price of the limited right.

The Stock Plan also authorizes the Compensation Committee to grant to
participants awards of Common Stock and other awards that are denominated in,
payable in, valued in whole or in part by reference to, or are otherwise based
on the value of, Common Stock ("Other Stock-Based Awards"). The Compensation
Committee has discretion to determine the participants to whom Other Stock-Based
Awards are to be made, the times at which such awards are to be made, the size
of such awards, the form of payment, and all other conditions of such awards,
including any restrictions, deferral periods or performance requirements. The
terms of the Other Stock-Based Awards will be subject to such rules and
regulations as the Compensation Committee determines.

Any award under the Stock Plan may provide that the participant has the
right to receive currently or on a deferred basis dividends or dividend
equivalents or other cash payments in addition to or in lieu of such awards, all
as the Compensation Committee determines.

If the Compensation Committee determines that any dividend or other
distribution (whether in the form of cash, securities or other property),
recapitalization, stock split, reverse stock split reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of shares
or other securities of the Company, issuance of warrants or other rights to
purchase securities of the Company, or other similar corporate transaction or
event affects the Common Stock such that an adjustment is appropriate to prevent
dilution or enlargement of the benefits intended under the Stock Plan, then the
Compensation Committee has discretion to (i) adjust the number and kind of
shares that may be the subject of future awards under the Stock Plan, (ii) make
equitable adjustment in the number and kind of shares (or other securities or
property) subject to outstanding awards and the respective grant or exercise
prices thereof and (iii) if appropriate, provide for the payment of cash to a
participant.

52
<PAGE>
The Stock Plan may be amended or terminated at any time by the Board of
Directors, except that no amendment may be made without stockholder approval if
such approval is determined by the Compensation Committee to be necessary or
advisable in order to comply with any tax or regulatory requirement, including
any approval requirement that is necessary to qualify awards as
"performance-based" compensation under Section 162(m) of the Code.

The grant of awards under the Stock Plan is entirely in the discretion of
the Compensation Committee. The Compensation Committee has not yet made a
determination as to the awards to be granted under the Stock Plan.

FEDERAL INCOME TAX CONSEQUENCES

An optionee will not recognize any income for federal income tax purposes
upon the grant of a non-qualified stock option, nor will the Company normally
realize any deduction for federal income tax purposes at the time of grant. When
an optionee exercises a non-qualified option, the difference between the
exercise price and any higher fair market value of the Common Stock on the date
of exercise will be ordinary income to the optionee (subject to withholding) and
will generally be allowed as a deduction at that time for federal income tax
purposes to the Company.

Any gain or loss realized by an optionee on disposition of the Common Stock
acquired upon exercise of a non-qualified option will generally be capital gain
or loss to the optionee, long-term or short-term depending on the holding
period, and will not result in any additional federal income tax consequences to
the Company. The optionee's basis in the Common Stock for determining gain or
loss on the disposition will be the fair market value of the Common Stock
determined generally at the time of exercise.

When an optionee exercises an incentive stock option while employed by the
Company or a subsidiary or within three months (one year for disability) after
termination of employment by reason of retirement or death, no ordinary income
will be recognized by the optionee at that time, but the excess (if any) of the
fair market value of the Common Stock acquired upon such exercise over the
option price will be an adjustment to taxable income for purposes of the federal
alternative minimum tax applicable to individuals. If the Common Stock acquired
upon exercise of the incentive stock option is not disposed of prior to the
expiration of one year after the date of acquisition and two years after the
date of grant of the option, the excess (if any) of the sale proceeds over the
aggregate option exercise price of such Common Stock will be long-term capital
gain, but the Company will not be entitled to any tax deduction with respect to
such gain. Generally, if the Common Stock is disposed of prior to the expiration
of such periods (a "Disqualifying Disposition"), the excess of the fair market
value of such Common Stock at the time of exercise over the aggregate option
exercise price (but not more than the gain on the disposition if the disposition
is a transaction on which a loss, if realized, would be recognized) will be
ordinary income at the time of such Disqualifying Disposition (and the Company
will generally be entitled to a federal income tax deduction in a like amount).
Any gain realized by the optionee as the result of a Disqualifying Disposition
that exceeds the amount treated as ordinary income will be capital in nature,
long-term or short-term depending on the holding period. If an incentive stock
option is exercised more than three months (one year for disability) after
termination of employment, the federal income tax consequences are the same as
described above for non-qualified stock options.

If the exercise price of an option is paid by the surrender of previously
owned shares, the basis of the previously owned shares carries over to the
shares received in replacement therefor. If the option is a non-qualified
option, the income recognized on exercise is added to the basis. If the option
is an incentive stock option, the optionee will recognize gain if the shares
surrendered were acquired through the exercise of an incentive stock option and
have not been held for the applicable holding period. This gain will be added to
the basis of the shares received in replacement of the previously owned shares.

Awards that are granted, accelerated or enhanced upon the occurrence of a
change of control may give rise, in whole or in part, to excess parachute
payments within the meaning of Section 280G of the Code to the extent that such
payments, when aggregated with other payments subject to Section 280G,

53
<PAGE>
exceed the limitations contained therein. Such excess parachute payments will be
nondeductible to the Company and subject the recipient of the payments to a 20%
excise tax.

If permitted by the Compensation Committee, at any time that a participant
is required to pay to the Company the amount required to be withheld under
applicable tax laws in connection with the exercise of a stock option or the
issuance of Common Stock, the participant may elect to have the Company withhold
from the shares that the participant would otherwise receive shares of Common
Stock having a value equal to the amount to be withheld. This election must be
made prior to the date on which the amount of tax to be withheld is determined.

The foregoing discussion summarizes the federal income tax consequences of
stock options that may be granted under the Company Adjusted Stock Award Plan,
the Directors Plan and the Stock Plan, based on current provisions of the Code,
which are subject to change. This summary does not cover any foreign, state or
local tax consequences or participation in such plans.

RETIREMENT BENEFIT PROGRAM

The Company has adopted a retirement benefit program. Under the program,
each participant, including Executive Officers, is entitled to benefits based
upon the sum of his starting account balance, annual benefit credits and annual
interest credits allocated to his "account." The starting account balance is
equal to the value of the participant's accrued benefit under FTX's plan at the
time of the FTX Stockholder Distribution. The annual benefit credit consists of
two parts: (1) 4% of the participant's earnings for the year in excess of the
social security wage base for the year; and (2) a percentage of the
participant's total earnings for the year. The percentage of total earnings is
determined as follows:

- 15%, if as of January 1, 1997, the participant's age plus service totaled
65 or more, he was at least 50 years old and had at least 10 years of
service;

- 10%, if as of January 1, 1997, the participant's age plus service totaled
55 or more, he had at least 10 years of service, and he did not meet the
requirements for a 15% allocation;

- 7%, if as of January 1, 1997, the participant's age plus service totaled
45 or more, he had at least 5 years of service, and he did not meet the
requirements for a greater allocation;

- 4%, if the participant did not meet the requirements for a greater
allocation.

The annual interest credit is equal to the account balance at the end of the
prior year multiplied by the annual yield on 10-year U.S. Treasury securities on
the last day of the preceding year. Interest credits stop at the end of the year
in which the participant reaches age 60. Upon retirement a participant's account
balance is payable either in a lump sum or an annuity, as selected by the
participant. A participant's "earnings" are comprised of annual base salary,
plus a percentage of certain bonuses, which percentage is the lesser of 50% or
the percentage of the bonus not deferred. Years of service include not only
years with the Company but also any years with FTX and FRP and any of their
predecessors.

Benefits payable to a participant under the FTX retirement benefit program
under which participants in the Company's plan have previously participated were
at one time determined primarily by such individual's final average compensation
and years of service. The Company's retirement benefit program does not
incorporate this design. However, if a participant's age plus service equaled 65
or more as of January 1, 1997, and as of that date the participant had both
attained age 50 and had at least 10 years of service, the participant is
"grandfathered" into a benefit of no less than the benefit under the former FTX
retirement benefit formula based on years of service and final average earnings.

Currently no Executive Officers are participating in this program.

54
<PAGE>
PRINCIPAL STOCKHOLDERS

None of the individuals serving as a Director or Executive Officer of the
Company currently owns any shares of Common Stock, all of which currently are
owned by FRP. The Directors and Executive Officers will receive shares of Common
Stock in respect of shares of FTX Common Stock and FRP units of partnership
interest held by them at the time of the Distributions. In addition, the Company
has agreed to issue to the Directors and Executive Officers and other holders of
stock options, stock appreciation rights and other similar stock-based awards
granted under certain FTX benefit plans options to purchase Common Stock under
the Company Adjusted Stock Award Plan described above.

The following table sets forth certain information regarding the number of
shares of Common Stock expected to be beneficially owned by (i) each of the
Directors and Executive Officers; (ii) all Directors and Executive Officers as a
group and (iii) each person expected to own more than 5% of the outstanding
Common Stock, immediately after the Distributions, determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934 (the "1934 Act"). In
calculating the number of shares, it is assumed that each share of FTX Common
Stock converted in the Merger will entitle the holder to receive 0.2123 of a
share of Common Stock. Except as otherwise noted, each of the individuals will
have sole voting and investment power with respect to such Common Stock.

<TABLE>
<CAPTION>
NUMBER OF SHARES
ANTICIPATED TO BE
BENEFICIALLY PERCENTAGE
NAME OWNED(1) OF CLASS
- ------------------------------------------------------------------------------ ----------------- -----------
<S> <C> <C>
James R. Moffett.............................................................. 77,501(2)(3) *
Rene L. Latiolais............................................................. 43,241(2)(4) *
Richard C. Adkerson........................................................... 9,985(2)(5) *
Robert M. Wohleber............................................................ 2,684 *
John G. Amato................................................................. 41,468(6) *
J. Terrell Brown.............................................................. -- --
Thomas D. Clark, Jr........................................................... -- --
B.M. Rankin, Jr. ............................................................. 36,182(7) *
All Directors and Executive Officers as a Group............................... 211,061(8) 2.0%
Wellington Management Company, L.L.P. ........................................ 1,307,680 12.6%
75 State Street
Boston, Massachusetts 02109
Merrill Lynch & Co., Inc. .................................................... 797,413 7.7%
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
</TABLE>

- ------------------------

* Less than 1%.

(1) Includes shares that would be acquired within sixty days after October 31,
1997, upon the exercise of outstanding FTX stock options or Company stock
options to be granted pursuant to the Company Adjusted Stock Option Plan as
follows: Mr. Moffett, 18,840 shares; Mr. Latiolais, 30,827 shares; Mr.
Adkerson, 7,678 shares; Mr. Wohleber, 2,684 shares; Mr. Amato, 14,455
shares; Mr. Rankin, 2,822 shares; all Directors and Executive Officers as a
group, 74,484 shares.

(2) Includes shares held by the trustee under FTX's Employee Capital
Accumulation Program as of October 31, 1997 as follows: Mr. Moffett, 917
shares; Mr. Latiolais, 639 shares and Mr. Adkerson, 178 shares.

(3) Includes 9,614 shares held for the benefit of three trusts with respect to
which Mr. Moffett, as co-trustee, shares voting and investment power, but as
to which he disclaims beneficial ownership.

(4) Includes 58 shares held by custodian of reinvestment plan for the benefit of
Mr. Latiolais.

55
<PAGE>
(5) Includes 52 shares held in a retirement trust for the benefit of Mr.
Adkerson.

(6) Includes 54 shares held in a retirement trust for the benefit of Mr. Amato;
3 shares held in a retirement trust for the benefit of Mr. Amato's wife; 617
shares held for trusts with respect to which Mr. Amato, as trustee, has sole
voting and investment power but as to which he disclaims beneficial
ownership and 17,151 shares held for the benefit of trusts with respect to
which Mr. Amato, as co-trustee, shares voting and investment power but as to
which he disclaims beneficial ownership.

(7) Includes 12,281 shares with respect to which Mr. Rankin has sole voting and
investment power under a power of attorney but as to which he disclaims
beneficial ownership.

(8) Includes the 41,544 shares discussed in footnotes (2) through (7) above.
------------------------

CERTAIN TRANSACTIONS

FRP and the Company are parties to the Distribution Agreement and the
Employee Benefits Agreement, which are discussed elsewhere in this Prospectus.
See "The Merger and the Distributions" and "Management--Employee Benefits
Agreement." At the time these agreements were negotiated and executed, the
Company was a wholly-owned subsidiary of FRP.

Prior to 1996, the Company received certain management and administrative
services from FTX. Beginning in 1996, FMS began providing these services under a
Management Services Agreement that was negotiated and executed when FMS was an
affiliate of FTX and FRP, and the Company was a wholly-owned subsidiary of FRP.
Subsequent to the Distributions, FMS will be 25% owned by the Company. Pursuant
to these arrangements, the Company paid FTX $8.8 million and $15.9 million
(including $7.0 million for stock appreciation right costs) for fiscal 1994 and
1995, respectively, and in 1996 paid FMS and FTX $6.7 million and $2.0 million,
respectively.

IMC-Agrico and the Company are parties to the Sulphur Supply Agreement. At
the time this agreement was negotiated and executed, the Company was a
wholly-owned subsidiary of FRP, which currently owns a 41.45% interest in
IMC-Agrico. For fiscal 1994, 1995 and 1996, payments from IMC-Agrico represented
58%, 54% and 54% of the Company's total revenues, respectively.

Prior to January 1, 1997, the Main Pass operations were managed by
Freeport-McMoRan Oil and Gas Company ("FMOG"), an affiliate of FRP and FTX. For
fiscal 1994, 1995 and 1996, the Company paid FMOG $0.8 million, $0.9 million and
$1.0 million, respectively, for management services provided pursuant to this
arrangement. Since January 1, 1997, the Main Pass operations have been managed
by FRP and, after the Distributions, will be managed by the Company.

Management believes that the terms of all of these agreements are, and
expects that the terms of all future agreements with affiliates will be, on
terms no less favorable to the Company than those that could be obtained in an
arm's-length transaction with an unaffiliated party.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock, $.01 par value per share, and 50,000,000 shares of preferred
stock, $.01 par value per share (the "Preferred Stock"). Upon completion of the
Distributions, approximately 10,346,578 shares of Common Stock will be
outstanding, and no shares of Preferred Stock will be outstanding. Prior to the
Distributions, there has been no public market for the Common Stock. Although
application has been made to have the Common Stock listed on the NYSE, there can
be no assurance that a market for the Common Stock will develop or, if
developed, will be sustained. See "Risk Factors--Absence of Trading Market." The
following summary description of the capital stock of the Company is qualified
in its entirety by reference to the Company's Certificate of Incorporation
("Certificate") and By-laws, copies of which are filed as exhibits to the
Registration Statement of which this Prospectus forms a part.

COMMON STOCK

Each holder of Common Stock is entitled to one vote for each share of Common
Stock held of record on all matters as to which stockholders are entitled to
vote and stockholders may not cumulate votes for the election of directors.
Subject to any preferences accorded to the holders of the Preferred Stock, if
and when issued by the Board of Directors, holders of Common Stock are entitled
to dividends at such times and in such amounts as the Board of Directors may
determine. The Company does not intend to pay dividends for the foreseeable
future. See "Dividend Policy." Upon the dissolution, liquidation or winding up
of the Company, after payment of debts, expenses and the liquidation preference
plus any accrued dividends on any outstanding shares of Preferred Stock, the
holders of Common Stock will be entitled to receive all remaining assets of the
Company ratably in proportion to the number of shares held by them. Holders of
Common Stock have no preemptive, subscription or conversion rights and are not
subject to further calls or assessments, or rights of redemption by the Company.
The shares of Common Stock being distributed in the Distributions will be
validly issued, fully paid and nonassessable.

PREFERRED STOCK

The Company's Board of Directors has the authority, without approval of the
stockholders, to issue shares of Preferred Stock in one or more series and to
fix the number of shares and rights, preferences and limitations of each series.
Among the specific matters that may be determined by the Board of Directors are
the dividend rights, the redemption price, if any, the terms of a sinking fund,
if any, the amount payable in the event of any voluntary liquidation,
dissolution or winding up of the affairs of the Company, conversion rights, if
any, and voting powers, if any.

The existence of authorized but unissued Common Stock and undesignated
Preferred Stock may enable the Board of Directors to make more difficult or to
discourage an attempt to obtain control of the Company by means of a merger,
tender offer, proxy contest or otherwise. If, in the exercise of its fiduciary
responsibilities, the Board of Directors were to determine that a takeover
proposal was not in the Company's best interest, such shares could be issued by
the Board of Directors without stockholder approval in one or more transactions
that might prevent or make more difficult or costly the completion of the
takeover transaction by diluting the voting or other rights of the proposed
acquiror or insurgent stockholder group, by creating a substantial voting block
in institutional or other hands that might undertake to support the position of
the incumbent Board of Directors, by effecting an acquisition that might
complicate or preclude the takeover, or otherwise. The Company's Certificate
grants the Board of Directors broad power to establish the rights and
preferences of the authorized and unissued Preferred Stock, one or more series
of which could be issued entitling holders (i) to vote separately as a class on
any proposed merger or consolidation, (ii) to cast a proportionately larger vote
together with the Common Stock on any such transaction or for all purposes,
(iii) to elect directors having terms of office or voting rights greater than
those of other directors, (iv) to convert Preferred Stock into a greater number
of shares of Common Stock or other securities, (v) to demand redemption at a
specified price under prescribed circumstances related to a change of control or
(vi) to exercise other rights that could have the effect of

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impeding a takeover. The issuance of shares of Preferred Stock pursuant to the
Board of Directors' authority described above may adversely effect the rights of
holders of the Common Stock.

In addition, certain other charter provisions that are described below may
have the effect, either alone, in combination with each other, or combined with
the existence of authorized but unissued capital stock, of making more difficult
or discouraging an acquisition of the Company deemed undesirable by the Board of
Directors.

CERTAIN CHARTER AND BY-LAW PROVISIONS

CLASSIFIED BOARD OF DIRECTORS

The Company's Certificate and By-laws divide the members of the Board of
Directors into three classes, with each class to be as nearly equal in number of
directors as possible, serving staggered three-year terms.

SIZE OF THE BOARD OF DIRECTORS; REMOVAL OF DIRECTORS; FILING OF VACANCIES ON
THE BOARD OF DIRECTORS

The Company's Certificate and By-laws provide that the number of directors
shall be fixed from time to time by the Board of Directors, but shall not be
fewer than the number required by Delaware law. Under the Company's Certificate,
a vote of 80% of the outstanding shares of capital stock entitled to vote
generally in an election of directors (the "Voting Stock") is required to remove
a director, and a director may only be so removed for cause involving fraud or a
violation of the duty of loyalty as determined by a final judgment of a court of
competent jurisdiction. The Certificate also provides that a newly created
directorship resulting from an increase in the number of directors may only be
filled by the Board of Directors and any vacancies on the Board of Directors
resulting from death, resignation, removal or other cause may be filled only by
the affirmative vote of both (a) a majority of the remaining directors then in
office and (b) a majority of all Continuing Directors (defined below), voting as
a separate group. In addition, these provisions specify that any director
elected to fill a vacancy on the Board of Directors will serve for the remainder
of the full term of the class of directors in which the new directorship was
created or in which the vacancy occurred.

STOCKHOLDER ACTION BY UNANIMOUS CONSENT

Under Delaware law, unless a corporation's certificate of incorporation
specifies otherwise, any action that could be taken by its stockholders at an
annual or special meeting may be taken, instead, without a meeting and without
notice to or a vote of other stockholders, if a consent in writing is signed by
holders of outstanding stock having voting power that would be sufficient to
take such action at a meeting at which all outstanding shares were present and
voted. The Company's Certificate provides that stockholder action may be taken
only at an annual or special meeting of stockholders. As a result, the Company's
stockholders may not act upon any matter except at a duly called meeting.

AMENDMENT OF THE BY-LAWS

Under Delaware law, the power to adopt, amend or repeal by-laws is conferred
upon the stockholders; however, a corporation may in its certificate of
incorporation also confer upon the board of directors the power to adopt, amend
or repeal its By-laws. The Company's Certificate and By-laws grant the Board of
Directors the power to adopt, amend and repeal the By-laws at any regular or
special meeting of the Board of Directors but only upon the affirmative vote of
both (i) a majority of the directors then in office and (ii) a majority of the
Continuing Directors (defined below), voting as a separate group. The Company's
stockholders may adopt, amend or repeal the By-laws but only at any regular or
special meeting of stockholders by an affirmative vote of 80% of the Voting
Stock.

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ADVANCE NOTICE OF STOCKHOLDER NOMINATIONS AND STOCKHOLDER BUSINESS

The Company's By-laws permit stockholders to nominate a person for election
as a director or bring other matters before a stockholders' meeting only if such
stockholder has been, for at least one year, the beneficial owner of at least 1%
of the Voting Stock and only if written notice of such intent to nominate or
bring business before a meeting is given as described below.

A stockholder intending to nominate a person for election as a director or
to propose other matters at a stockholders' meeting must furnish notice of such
intention to the Company's Secretary not more than 270 days and not less than 60
days in advance of the first anniversary of the preceding year's annual
stockholders' meeting, subject to certain exceptions applicable principally to
special meetings. The notice must, among other things, state the name, age and
address of the stockholder submitting the notice and any persons acting in
concert with such stockholder, the number of shares of Voting Stock held by the
stockholder and the dates such stock was acquired, and must include a
representation by such stockholder that he or she is a holder of record of the
Company's capital stock and intends to appear at the meeting in person and make
the nomination or bring up the specified matter.

In the case of nominations for directors, the notice must also state (i) the
name, age, address and principal occupation of each nominee, (ii) a description
of all arrangements between the nominating stockholder and each nominee, (iii)
other information required to be included in a proxy statement pursuant to the
proxy rules of the Commission and (iv) the consent of each nominee to serve as a
director of the Company if elected and an affidavit of each such nominee
certifying that he meets the qualifications necessary to serve as a director of
the Company. In the case of other proposed business, the notice must set forth a
brief description of the business, the reasons for conducting such business at
the meeting and any material interest of the stockholder therein. The Chairman
of the stockholders' meeting will have the power to disregard any nomination or
other matter that fails to comply with these procedures. In addition, the
Company's Secretary may require any stockholders submitting a notice of intent
to make a nomination or bring other business before a stockholders' meeting to
furnish such documentary information as may be necessary to determine that such
stockholder has been for at least one year the beneficial owner of at least 1%
of the Voting Stock.

With respect to any proposal by a stockholder to bring before a meeting any
matter other than the nomination of directors, the Company's By-laws provide
that the Company may disregard proposals that (i) are substantially duplicative
of a prior-received proposal to be voted upon at an upcoming meeting, (ii) deal
with substantially the same subject matter as a prior proposal that was voted
upon within the preceding five years and that failed to receive affirmative
votes in excess of certain specified levels, which range, depending on the
circumstances, between 3% and 10%, or (iii) in the judgment of the Board of
Directors, are not proper subjects for action by stockholders under Delaware
law.

AMENDMENT OF CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION

Under Delaware law, unless the certificate of incorporation specifies
otherwise, a corporation's certificate of incorporation may be amended by the
affirmative vote of the majority of the stockholders. The Company's Certificate
requires the affirmative vote of 80% of the Voting Stock to amend, alter or
repeal certain provisions of the Certificate regarding (i) stockholder unanimous
written consents, (ii) the classification, filling of vacancies and removal of
members of the Board of Directors, (iii) the limitation of liability of
directors, (iv) business combinations and (v) amendments to the Certificate and
the By-laws.

SPECIAL MEETINGS OF THE STOCKHOLDERS

The Company's By-laws provide that special meetings of stockholders may be
called only by the Chairman of the Board of Directors, the Company's president
or a majority of the Board of Directors. Stockholders do not have the power to
call a special meeting.

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BUSINESS COMBINATIONS

Delaware law provides that, unless otherwise provided in a corporation's
certificate of incorporation, a merger, sale of substantially all of the assets
or dissolution of a company requires the approval of the holders of a majority
of the outstanding capital stock. The Company's Certificate does not alter this
vote requirement generally, but provides that, if one of these transactions or
certain issuances, reclassifications or other transactions affecting the
Company's capital stock involves an Interested Stockholder (defined below), the
transaction must be approved (i) by a majority of both the directors then in
office and a majority of the Continuing Directors (defined below), voting as a
separate group and (ii) by the affirmative vote of (A) the holders of 80% of the
Voting Stock, voting together as a single class, and (B) 75% of the Voting Stock
other than Voting Stock beneficially owned by the Interested Stockholder. An
Interested Stockholder is any person who (i) beneficially owns 15% or more of
the Voting Stock or (ii) is an affiliate of the Company and, at any time within
two years prior to the date in question, beneficially owned 15% or more of the
then outstanding Voting Stock, other than the Company or its subsidiaries, or
any person owning any shares of the capital stock of the Company as of the date
of filing of the Company's Certificate and any person whose beneficial ownership
of any capital of the Company arises solely as a result of a trusteeship or a
custodial relationship with any employee stock ownership or other employee
benefit plan of the Company. A Continuing Director is any member of the Board of
Directors who is not an Interested Stockholder or an affiliate thereof and (i)
was a director prior to the time the Interested Stockholder became an Interested
Stockholder or (ii) was recommended or elected by a majority of the Continuing
Directors at a meeting at which a quorum consisting of a majority of the
Continuing Directors was present. In the absence of an Interested Stockholder,
the Continuing Directors shall mean all the directors then in office.

This additional voting requirement does not apply if the transaction has
been approved by a majority of the Continuing Directors, or if all of the
following conditions have been met: (i) the aggregate amount of consideration
received per share by the holders meet certain "fair price" criteria, (ii) prior
to the consummation of the transaction (a) there has been no failure to declare
or pay dividends on any outstanding Preferred Stock or Common Stock, (b) the
Interested Stockholder has not received the benefits (except proportionately as
a stockholder) of any loans, advances or other financial assistance or tax
advantages provided by the Company, and (c) the Interested Stockholder has not
caused any material change in the Company's equity capital structure, and (iii)
the Interested Stockholder has not become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction that resulted in such
Interested Stockholder becoming an Interested Stockholder or as a result of a
pro rata stock dividend.

The Company is also subject to Section 203 of the DGCL, which imposes a
three-year moratorium on the ability of Delaware corporations to engage in a
wide range of specified transactions with any interested stockholder, defined to
include, among others, any person other than such corporation and any of its
majority-owned subsidiaries who own 15% or more of any class or series of stock
entitled to vote generally in the election of directors, unless, among other
exceptions, the transaction is approved by (i) the Board of Directors prior to
the date the interested stockholder obtained such status, or (ii) the holders of
two-thirds of the outstanding shares of each class or series of stock entitled
to vote generally in the election of directors, not including those shares owned
by the interested stockholder.

The provisions described above may tend to deter any potential unfriendly
offers or other efforts to obtain control of the Company that are not approved
by the Board of Directors and thereby deprive the stockholders of opportunities
to sell shares of Common Stock at prices higher than the prevailing market
price. On the other hand, these provisions will tend to assure continuity of
management and corporate policies and to induce any person seeking control of
the Company or a business combination with the Company to negotiate on terms
acceptable to the then elected Board of Directors.

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RIGHTS AGREEMENT

The Company plans to adopt the Rights Agreement at or prior to the
Distributions, pursuant to which each share of Common Stock will include an
associated preferred share purchase right (a "Right"). Each Right will entitle
the registered holder to purchase from the Company one one-hundredth of a share
of Participating Preferred Stock, $.01 par value, for an exercise price to be
determined by the Board of Directors (the "Exercise Price"), subject to
adjustment. The Rights will be represented by the Common Stock certificates and
will be exercisable only after an entity acquires 15% or more of the outstanding
Common Stock or commences a tender offer that will result in the entity owning
15% or more of the Common Stock. After an entity acquires 15% or more of the
outstanding Common Stock, each Right would then entitle the holder (other than
the acquiring entity) to purchase, at the Exercise Price, the number of shares
of Common Stock or other securities of the Company (or, in certain situations,
the acquiring entity) having a market value of twice the Right's Exercise Price
(the "Flip-in Date"). The Rights will expire on the tenth anniversary of the
date it is entered into unless earlier redeemed by the Company, as described
below. Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including without limitation, the right to vote or
to receive dividends.

The Board of Directors of the Company may, at its option, at any time prior
to the close of business on the Flip-in Date, redeem all (but not less than all)
the then outstanding Rights at a price to be determined by the Board of
Directors (the "Redemption Price"), as provided in the Rights Agreement.
Immediately upon the action of the Board of Directors of the Company electing to
redeem the Rights, without any further action and without any notice, the right
to exercise the Rights will terminate and each Right will thereafter represent
only the right to receive the Redemption Price in cash for each Right so held.

The Rights will not prevent a takeover of the Company. However, the Rights
may cause substantial dilution to a person or group that acquires 15% or more of
the Common Stock unless the Rights are first redeemed by the Board of Directors
of the Company. The Rights are intended to encourage any person desiring to
acquire a controlling interest in the Company to do so through a transaction
negotiated with the Company's Board of Directors rather than through a hostile
takeover attempt. The Rights are intended to assure that any acquisition of
control of the Company will be subject to review by the Board to take into
account, among other things, the interests of all the Company's stockholders.

TRANSFER AGENT

The transfer agent and registrar for the Common Stock is ChaseMelon
Shareholder Services, L.L.C.

LIMITATION OF DIRECTORS' AND OFFICERS' LIABILITY AND INDEMNIFICATION

In accordance with the DGCL, the Company's Certificate contains provisions
eliminating the personal liability of the directors to the Company and its
stockholders for monetary damages for breaches of their fiduciary duties as
directors to the fullest extent permitted by Delaware law. By virtue of these
provisions, under current Delaware law, a director of the Company will not be
personally liable for monetary damages for a breach of his or her fiduciary duty
except for liability for (a) a breach of his or her duty of loyalty to the
Company or to its stockholders, (b) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (c) dividends or
stock repurchases or redemptions that are unlawful under Delaware law and (d)
any transaction from which he or she receives an improper personal benefit. In
addition, the Certificate provides that if Delaware law is amended to authorize
the further elimination or limitation of the liability of a director, then the
liability of the directors shall be eliminated or limited to the fullest extent
permitted by Delaware law, as amended. These provisions pertain only to breaches
of duty by directors as directors and not in any other corporate capacity, such
as officers, and limit liability only for breaches of fiduciary duties under
Delaware corporate law and not for violations of other laws such as the federal
securities laws.

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As a result of the inclusion of such provisions, stockholders may be unable
to recover monetary damages against directors for actions taken by them that
constitute negligence or gross negligence or that are in violation of their
fiduciary duties, even though it may be possible to obtain injunctive or other
equitable relief with respect to such actions. If equitable remedies are found
not to be available to stockholders in any particular case, stockholders may not
have any effective remedy against the challenged conduct. These provisions may
have the effect of reducing the likelihood of derivative litigation against
directors that might have benefitted the Company.

The Company believes that such provisions are necessary to attract and
retain qualified individuals to serve as directors. In addition, such provisions
will allow directors to perform their duties in good faith without concern for
the application of monetary liability on a retrospective basis in the event that
a court determines their conduct to have been negligent or grossly negligent.

The Company's By-laws require the Company to indemnify its officers and
directors against expenses and costs, judgments, settlements and fines incurred
in the defense of any claim, including any claim brought by or in the right of
the Company, to which they were made parties by reason of being or having been
officers or directors.

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COMPARISON OF THE RIGHTS OF STOCKHOLDERS

The following is a summary of material differences between the rights of
holders of the Company's Common Stock and the rights of holders of FTX Common
Stock. As each of Freeport Sulphur and FTX is organized under the laws of
Delaware, these differences arise principally from provisions of the certificate
of incorporation and by-laws of each of Freeport Sulphur and FTX. See
"Description of Capital Stock."

The following summaries do not purport to be complete statements of the
rights of Freeport Sulphur stockholders under the Freeport Sulphur Certificate
and By-laws as compared with the rights of FTX stockholders under the FTX
Restated Certificate of Incorporation, as amended (the "FTX Certificate"), and
Amended and Restated By-laws (the "FTX By-laws") or a complete description of
the specific provisions referred to herein. The identification of specific
differences is not meant to indicate that other equal or more significant
differences do not exist. These summaries are qualified in their entirety by
reference to the DGCL and governing corporate instruments of Freeport Sulphur
and FTX, to which stockholders are referred.

DIRECTORS

Freeport Sulphur directors may be removed at any time by the vote of 80% of
the stockholders entitled to vote for such director, but only for cause.
Vacancies or newly created directorships in the Freeport Sulphur Board of
Directors may be filled for the unexpired term only by a majority vote of both
the remaining directors and of the Continuing Directors, defined above.

The FTX Certificate and FTX By-laws do not provide for removal of directors
for cause, however, under the DGCL, where a corporation's board is classified,
stockholders may remove directors only for cause. The FTX Certificate provides
that a newly created directorship resulting from any increase in the number of
directors and any vacancies on the FTX Board resulting from death, resignation,
disqualification, removal or other reason may be filled solely by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the FTX Board.

RIGHTS AGREEMENT

Freeport Sulphur has adopted the Rights Agreement as discussed above.
Subject to the terms of the Rights Agreement, if an entity acquires 15% or more
of the outstanding Common Stock, each holder of a Right (other than the
acquiring entity) would be entitled to purchase a number of shares of Common
Stock or other securities of Freeport Sulphur (or, in certain situations, the
acquiring entity) having a market value of twice the Right's exercise price.

FTX does not have a stockholder rights plan.

BUSINESS COMBINATIONS

The FTX Certificate has similar provisions requiring that certain
transactions involving holders of 20% or more of the FTX Common Stock be
approved by the affirmative vote of the holders of at least 85% of the
outstanding shares of FTX Common Stock entitled to vote.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Distributions, the Company will have 10,346,578
shares of Common Stock outstanding, all of which will be owned by the FTX
stockholders and the FRP public unitholders. All such shares will be freely
transferable without restriction under the 1933 Act except by persons who are
deemed to be an "affiliate" of the Company as defined in Rule 144 under the 1933
Act or by persons who may be deemed to be an "affiliate" of FTX or IGL as
defined in paragraphs (c) and (d) of Rule 145 under the 1933 Act. Under the
Company Adjusted Stock Award Plan, the Company will issue options to purchase
Common Stock in substitution for certain options to purchase FTX Common Stock
outstanding under various FTX employee benefit plans at the time of the Merger.
See "Management--The Employee Benefits Agreement." In addition to such stock
options, the Company may grant additional options to purchase Common Stock
pursuant to the Directors Plan and Stock Plan subject to certain restrictions.
See "Management--Stock Option Plans." The Company currently expects to file a
registration statement under the 1933 Act to register shares reserved for
issuance under the Stock Option Plans discussed above. Shares issued pursuant to
the Company's Stock Option Plans after the effective date of such Registration
Statement (other than shares issued to "affiliates" as such term is defined
under the 1933 Act) generally will be freely tradeable without restriction or
further registration under the 1933 Act.

Pursuant to Rules 144 and 145 under the 1933 Act, the sale of Common Stock
held by affiliates of the Company, former affiliates of FTX or affiliates of IGL
will be subject to certain restrictions. Such persons may sell Common Stock
under such rules only if (i) the Company has filed all reports required to be
filed by Section 13 or 15(d) of the 1934 Act during the preceding twelve months,
(ii) such Common Stock is sold in a "broker's transaction" which is defined
under the 1933 Act as a sale in which (a) the seller does not solicit or arrange
for orders to buy the securities, (b) the seller does not make any payment other
than to the broker, (c) the broker does no more than execute the order and
receive a normal commission and (d) the broker does not solicit customer orders
to buy the securities, and (iii) such sale and all other sales made by such
person within the preceding three months do not exceed the greater of (x) one
percent of the outstanding shares of Common Stock or (y) the average weekly
trading volume of Common Stock on the New York Stock Exchange during the
four-week period preceding the sale. Any former affiliate of FTX who is not an
affiliate of IGL or the Company after the Merger may sell Common Stock without
restriction following the first anniversary of the Effective Time of the Merger.

LEGAL MATTERS

The legality of the shares of Common Stock offered hereby is being passed
upon for the Company by Jones, Walker, Waechter, Poitevent, Carrere & Denegre,
L.L.P., New Orleans, Louisiana. Miller & Chevalier, Chartered, special counsel
to FTX will pass upon certain federal income tax consequences.

EXPERTS

The financial statements of Freeport-McMoRan Sulphur Inc., the FRP
Transferred Businesses and the IGL Transferred Businesses appearing in this
Prospectus and Registration Statement to the extent and for the periods
indicated have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.

The information included in this Prospectus regarding the gross quantities
of reserves of the oil and gas properties described in this Prospectus and the
future cash flows and the present values thereof from such reserves is based on
estimates of such reserves and present values prepared by Ryder Scott Company,
Petroleum Engineers in reliance upon the authority of such firm as experts in
petroleum engineering.

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AVAILABLE INFORMATION

Following the Distributions, the Company will be subject to the information
requirements of the 1934 Act and in accordance therewith will file reports,
proxy statements and other information with the Commission. The reports, proxy
statements and other information to be filed by the Company with the Commission
may be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well
as the Commission's Regional Offices, including the following: Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such
information may be obtained by mail at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W. Street, N.W.,
Washington, D.C. 20549 or accessed electronically on the Commission's Web site
at (http://www.sec.gov). The Company has applied for listing of the Common Stock
on the NYSE upon notice of issuance and reports and other information concerning
the Company can also be inspected at the NYSE offices, 20 Broad Street, New
York, New York, 10005.

The Company intends to furnish holders of Common Stock with annual reports
containing consolidated financial statements prepared in accordance with United
States generally accepted accounting principles and audited and reported on,
with an opinion expressed, by an independent public accounting firm, as well as
quarterly reports for the first three quarters of each fiscal year containing
unaudited financial information.

The Company has filed with the Commission a Registration Statement on Form
S-1 under the 1933 Act with respect to the Common Stock being distributed
pursuant to this Prospectus. This Prospectus does not contain all information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Statements
contained herein concerning the provisions of any documents are not necessarily
complete and, in each instance, reference is made to the copy of such document
filed or incorporated by reference as an exhibit to the Registration Statement.
The Registration Statement and the related exhibits filed by the Company with
the Commission may be inspected and copied at the public reference facilities of
the Commission listed above.

65
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
FREEPORT-MCMORAN SULPHUR INC.
Report of Independent Public Accountants................................................................. F-2
Balance Sheet as of August 26, 1997...................................................................... F-3
Note to Balance Sheet.................................................................................... F-3

FRP TRANSFERRED BUSINESSES
Report of Independent Public Accountants................................................................. F-4
Balance Sheets as of September 30, 1997 (unaudited) and December 31, 1996 and 1995....................... F-5
Statements of Operations for the nine months ended September 30, 1997 and 1996 (unaudited) and the years
ended December 31, 1996, 1995 and 1994................................................................. F-6
Statements of Cash Flow for the nine months ended September 30, 1997 and 1996 (unaudited) and the years
ended December 31, 1996, 1995 and 1994................................................................. F-7
Statements of Changes in Net Assets to be Transferred for the nine months ended September 30, 1997 and
1996 (unaudited) and the years ended December 31, 1996, 1995 and 1994.................................. F-8
Notes to Financial Statements............................................................................ F-9

PRO FORMA FINANCIAL STATEMENTS (UNAUDITED) OF FREEPORT-MCMORAN SULPHUR INC.
Pro Forma Condensed Balance Sheet as of September 30, 1997............................................... F-21
Pro Forma Statement of Operations for the nine months ended September 30, 1997........................... F-22
Pro Forma Statement of Income for the year ended December 31, 1996....................................... F-23
Notes to Pro Forma Financial Statements.................................................................. F-24

IGL TRANSFERRED BUSINESSES
Report of Independent Public Accountants................................................................. F-27
Statements of Gross Sulphur and Oil Revenues and Direct Operating Expenses for the nine months ended
September 30, 1997 (unaudited) and for the year ended December 31, 1996................................ F-28
Notes to Financial Statements............................................................................ F-29
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Freeport-McMoRan Sulphur Inc.:

We have audited the accompanying balance sheet of Freeport-McMoRan Sulphur
Inc. (a Delaware corporation) as of August 26, 1997. This balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this balance sheet based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Freeport-McMoRan Sulphur Inc. as of
August 26, 1997 in conformity with generally accepted accounting principles.

Arthur Andersen LLP

New Orleans, Louisiana,
September 16, 1997

F-2
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

BALANCE SHEET

AUGUST 26, 1997

<TABLE>
<S> <C>
Cash.............................................................. $ --
---------
---------
Preferred stock, par value $0.01, 50,000,000 shares authorized,
none issued or outstanding...................................... $ --
Common stock, par value $0.01, 100,000,000 shares authorized, 100
shares issued and outstanding................................... 1.00
Additional paid-in capital........................................ 99.00
Less subscription receivable...................................... (100.00)
---------
Total stockholder's equity.................................... $ --
---------
---------
</TABLE>

The accompanying note is an integral part of this financial statement.

NOTE TO BALANCE SHEET

On August 26, 1997, IMC Global Inc. ("IGL") and Freeport-McMoRan Inc.
("FTX") executed a definitive agreement for FTX to merge with and into IGL (the
"Merger"). The terms of the Merger provide that each share of FTX common stock
will be converted into the right to receive (i) 0.90 of a share of IGL common
stock, (ii) one-third of a warrant exercisable for a share of IGL common stock
and (iii) a proportionate number of shares of a newly formed company
(Freeport-McMoRan Sulphur Inc.) that would be held by FTX immediately prior to
consummation of the Merger. Completion of the Merger is subject to, among other
things, approval of the definitive merger agreement by the IGL and FTX
shareholders and the expiration or early termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (early termination
having been granted). Both companies expect the Merger to be completed by the
end of 1997.

On August 26, 1997, Freeport-McMoRan Resource Partners, Limited Partnership
("FRP") acquired 100 shares of Freeport-McMoRan Sulphur Inc. (the "Company")
common stock, par value $0.01 per share for a $100.00 subscription. The Company,
a Delaware corporation, was formed for the purpose of owning and operating the
sulphur business and the 58.3% interest in the Main Pass sulphur and oil
operations owned by FRP, together with the 25.0% interest in Main Pass owned by
IGL, a joint venture partner with FRP, (collectively, the "Transferred
Businesses"). The Company will operate the Transferred Businesses and assume
substantially all liabilities related to the Transferred Businesses.

Immediately prior to the Merger, IGL will transfer its 25% interest in Main
Pass to FRP. FRP will then contribute the Transferred Businesses to the Company.

FRP intends to distribute 100% of the Company's common stock to its public
unitholders and to FTX, the administrative managing general partner and the
owner of 51.6% of FRP's partnership interest. FTX will then distribute the
shares of common stock that it receives from FRP to the FTX stockholders on a
pro rata basis. Until such distributions, the Company will be wholly owned by
FRP. FTX shall bear all of the costs and expenses incurred in connection with
the distributions.

Each share of the Company's common stock will also represent one right under
the Company's Preferred Stock Purchase Rights Plan. The rights are not currently
exercisable. Under certain circumstances the rights become exercisable for the
Company's preferred stock or the stock of a person effecting certain
reorganizations, mergers or combinations with the Company.

F-3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Freeport-McMoRan Sulphur Inc.:

We have audited the accompanying balance sheets of the FRP Transferred
Businesses (Note 1) of Freeport-McMoRan Resource Partners, Limited Partnership
("FRP") as of December 31, 1996 and 1995, and the related statements of
operations, cash flow and changes in net assets to be transferred for each of
the years in the three-year period ended December 31, 1996. These financial
statements are the responsibility of FRP's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the FRP Transferred
Businesses as of December 31, 1996 and 1995 and the results of their operations
and cash flow for each of the years in the three-year period ended December 31,
1996 in conformity with generally accepted accounting principles.

Arthur Andersen LLP

New Orleans, Louisiana,
September 16, 1997

F-4
<PAGE>
FRP TRANSFERRED BUSINESSES

BALANCE SHEETS

(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1995
SEPTEMBER ---------- ----------
30,
1997
-----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................... $ 2,572 $ 3,116 $ 2,774
Accounts receivable:
Customers................................................................. 21,878 27,402 31,359
Other..................................................................... 11,460 15,849 9,018
Inventories:
Products.................................................................. 24,216 21,859 22,221
Materials and supplies.................................................... 9,119 8,214 9,542
Prepaid expenses and other.................................................. 2,117 6,764 6,058
----------- ---------- ----------
Total current assets...................................................... 71,362 83,204 80,972
----------- ---------- ----------
Property, plant and equipment............................................... 918,870 916,858 932,102
Less accumulated depreciation and amortization.............................. 826,308 381,205 357,073
----------- ---------- ----------
Net property, plant and equipment......................................... 92,562 535,653 575,029
----------- ---------- ----------
Other assets................................................................ 14,657 14,763 24,466
----------- ---------- ----------
Total assets................................................................ $ 178,581 $ 633,620 $ 680,467
----------- ---------- ----------
----------- ---------- ----------

LIABILITIES AND NET ASSETS TO BE TRANSFERRED

Current liabilities:
Accounts payable............................................................ $ 14,029 $ 6,610 $ 13,980
Accrued liabilities......................................................... 18,619 25,539 16,742
Current portion of reclamation and mine shutdown reserves................... 11,509 25,261 8,191
----------- ---------- ----------
Total current liabilities................................................. 44,157 57,410 38,913
Reclamation and mine shutdown reserves...................................... 61,055 56,848 79,857
Other liabilities........................................................... 33,459 35,002 39,915
Net assets to be transferred................................................ 39,910 484,360 521,782
----------- ---------- ----------
Liabilities and net assets to be transferred................................ $ 178,581 $ 633,620 $ 680,467
----------- ---------- ----------
----------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>
FRP TRANSFERRED BUSINESSES

STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
----------------------- -----------------------------------
1997 1996 1996 1995 1994
----------- ---------- ---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues........................................... $ 158,304 $ 167,379 $ 221,426 $ 255,949 $ 151,795
Cost of sales:
Production and delivery............................ 126,328 118,228 160,982 168,504 94,388
Depreciation and amortization...................... 451,639 29,994 37,800 43,700 39,931
----------- ---------- ---------- ---------- -----------
Total cost of sales.............................. 577,967 148,222 198,782 212,204 134,319
General and administrative expenses................ 5,508 7,537 10,252 18,725 10,123
----------- ---------- ---------- ---------- -----------
Total costs and expenses......................... 583,475 155,759 209,034 230,929 144,442
----------- ---------- ---------- ---------- -----------
Net income (loss).................................. (425,171) 11,620 12,392 25,020 7,353
Pro forma income taxes (unaudited)................. 155,613 (4,369) (4,659) (6,845) (2,691)
----------- ---------- ---------- ---------- -----------
Pro forma net income (loss) (unaudited)............ $ (269,558) $ 7,251 $ 7,733 $ 18,175 $ 4,662
----------- ---------- ---------- ---------- -----------
----------- ---------- ---------- ---------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>
FRP TRANSFERRED BUSINESSES

STATEMENTS OF CASH FLOW

(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
------------------------ -------------------------------------
1997 1996 1996 1995 1994
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flow from operating activities:
Net income (loss)............................... $ (425,171) $ 11,620 $ 12,392 $ 25,020 $ 7,353
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization................. 451,639 29,994 37,800 43,700 39,931
Reclamation and mine shutdown
expenditures................................ (15,188) (6,451) (7,504) (2,476) (11,193)
Other......................................... (2,266) 3,462 6,421 4,642 6,074
(Increase) decrease in working capital:
Accounts receivable......................... 14,671 11,578 (3,234) (17,504) (6,674)
Inventories................................. (3,262) (2,050) 1,690 5,465 7,742
Prepaid expenses and other.................. (111) (508) 166 (1,605) (1,520)
Accounts payable and accrued liabilities.... 522 (6,133) 4,113 8,165 (7,511)
----------- ----------- ----------- ----------- -----------
Net cash provided by operating activities....... 20,834 41,512 51,844 65,407 34,202
----------- ----------- ----------- ----------- -----------

Cash flow from investing activities:
Capital expenditures............................ (2,989) (4,948) (3,834) (3,710) (11,231)
Sale of assets and other........................ 890 1,205 2,146 375 1,225
----------- ----------- ----------- ----------- -----------
Net cash used in investing activities........... (2,099) (3,743) (1,688) (3,335) (10,006)
----------- ----------- ----------- ----------- -----------

Cash flow from financing activities:
Net distributions to FRP........................ (19,279) (38,560) (49,814) (59,298) (24,596)
----------- ----------- ----------- ----------- -----------
Net cash used in financing activities........... (19,279) (38,560) (49,814) (59,298) (24,596)
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents................................... (544) (791) 342 2,774 (400)
Cash and cash equivalents at beginning of
year.......................................... 3,116 2,774 2,774 -- 400
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period...... $ 2,572 $ 1,983 $ 3,116 $ 2,774 $ --
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>

The accompanying notes, which include information in Note 8 regarding noncash
transactions,
are an integral part of these financial statements.

F-7
<PAGE>
FRP TRANSFERRED BUSINESSES

STATEMENTS OF CHANGES IN NET ASSETS TO BE TRANSFERRED

(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- ----------------------------------
1997 1996 1996 1995 1994
---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Balance at beginning of year......................... $ 484,360 $ 521,782 $ 521,782 $ 556,060 $ 573,303
Net income (loss).................................... (425,171) 11,620 12,392 25,020 7,353
Net distributions to FRP............................. (19,279) (38,560) (49,814) (59,298) (24,596)
---------- ---------- ---------- ---------- ----------
Balance at end of period............................. $ 39,910 $ 494,842 $ 484,360 $ 521,782 $ 556,060
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-8
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS AND BASIS OF PRESENTATION

ORGANIZATION AND OPERATIONS. On August 26, 1997, Freeport-McMoRan Resource
Partners, Limited Partnership ("FRP") acquired 100 shares of Freeport-McMoRan
Sulphur Inc. (the "Company" or "Freeport Sulphur") common stock, par value $0.01
per share, for a $100 subscription. The Company, a Delaware corporation, was
formed for the purpose of owning and operating the sulphur business and the
58.3% interest in the Main Pass sulphur and oil operations owned by FRP (the
"FRP Transferred Businesses"), together with the 25.0% interest in Main Pass
owned by IMC Global Inc. ("IGL"), a joint venture partner with FRP. FRP intends
to transfer these assets and related liabilities to the Company in connection
with the merger of Freeport-McMoRan Inc. ("FTX"), the administrative managing
general partner and the owner of 51.6% of FRP's partnership interest, with and
into IGL (the "Merger").

FRP intends to distribute 100% of the Company's common stock to its public
unitholders and to FTX. FTX will then distribute the shares of Freeport Sulphur
common stock that it receives from FRP to the FTX stockholders on a pro rata
basis in connection with the Merger.

BASIS OF PRESENTATION. The FRP Transferred Businesses operated as an
integral part of FRP during the periods covered by these financial statements,
which have been prepared from the books and records of FRP. Certain data has
been extracted from FRP records, or in certain cases derived on the basis of
allocations between the FRP Transferred Businesses and FRP's other businesses,
for purposes of presentation in the accompanying financial statements. No
interest expense has been allocated to the FRP Transferred Businesses as no
interest costs have been incurred in the past and no debt previously recorded by
FRP will be assumed by the Company. Intercompany balances between FRP and the
FRP Transferred Businesses have related to various general and administrative
and similar charges and have been settled monthly. FRP is not a taxable entity
and historically has not provided income taxes related to the FRP Transferred
Businesses. The related net deferred tax liability that would have been recorded
by the Company is disclosed in Note 5, but is not included in the accompanying
balance sheets. FTX provides benefit plans for those employees that are expected
to become Freeport Sulphur employees upon completion of the Merger. FTX will
transfer certain liabilities related to these plans to the Company and pay cash
to the Company for the assumption of certain of these liabilities as discussed
further in Note 6. The liabilities and cash amounts are not reflected in the
accompanying balance sheets.

The FRP Transferred Businesses balance sheet as of September 30, 1997 and
the related statements of operations, cash flow and changes in net assets to be
transferred for the nine-month periods ended September 30, 1997 and 1996 are
unaudited. These unaudited financial statements have been prepared from the
books and records of FRP and reflect all adjustments which are, in the opinion
of management, necessary for a fair statement of the results for the periods.
All such adjustments are, in the opinion of management, of a normal recurring
nature.

Upon completion of the merger, the combined financial statements of the
Company will include the operations of the FRP Transferred Businesses and the
25.0% interest in Main Pass owned by IGL. The Company will account for the 25.0%
interest in Main Pass owned by IGL at fair value under purchase accounting.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES. The preparation of the FRP Transferred Businesses
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. The

F-9
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
more significant areas requiring the use of management estimates include
reclamation and environmental obligations, postretirement and other employee
benefits, future cash flows associated with assets and useful lives for
depreciation and amortization. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS. Highly liquid investments purchased with a
maturity of three months or less are considered cash equivalents.

INVENTORIES. Inventories are stated at the lower of average cost or market.

PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment are carried at
cost, including interest capitalized during the construction and development
period. Expenditures for replacements and improvements are capitalized.
Depreciation for mining and production assets, including mineral interests, is
determined using the unit-of-production method based on estimated recoverable
reserves. Other assets are depreciated on a straight-line basis over estimated
useful lives of 17 to 30 years for buildings and 5 to 25 years for machinery and
equipment.

In 1995, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 121 (SFAS 121) which requires an assessment
of the carrying value of long-lived assets and a reduction of such carrying
value to fair value when events or changes in circumstances indicate that the
carrying amount may not be recoverable. As a result of its most recent review of
its sulphur assets, FRP and FTX concluded that the carrying value of the Main
Pass sulphur assets exceeded the undiscounted estimated future net cash flows,
such that an impairment writedown of $416.4 million (based on September 30, 1997
book values) was required. A similar analysis of the Culberson sulphur assets,
based on a reassessment of recoverable reserves utilizing recent production
history, also indicated an impairment writedown of $9.0 million (based on
September 30, 1997 book values) was required. Fair values were estimated using
discounted estimated future net cash flows related to these assets. The
writedowns to fair value were recorded by FRP and FTX in the third quarter of
1997 and are reflected in the unaudited September 30, 1997 financial statements
as additional depreciation and amortization charges. Future operating results of
Freeport Sulphur will reflect lower depreciation and amortization expense as a
result of these writedowns.

OIL CAPITALIZED COSTS. Oil producing operations are reflected using the
successful efforts method of accounting. Costs of leases, productive exploratory
wells and development activities are capitalized. Other exploration costs are
expensed. Depreciation and amortization is determined on a field-by-field basis
using the unit-of-production method. Gain or loss is included in income when
properties are sold.

ENVIRONMENTAL REMEDIATION AND COMPLIANCE. The FRP Transferred Businesses
incur significant costs for environmental programs and projects. Expenditures
pertaining to future revenues from operations are capitalized. Expenditures
resulting from the remediation of conditions caused by past operations which do
not contribute to future revenue generation are expensed. Liabilities are
recognized for remedial activities when the efforts are probable and the cost
can be reasonably estimated.

F-10
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
portion of reclamation and mine shutdown reserves includes $7.9 million which
will be reimbursed by third parties. The FRP Transferred Businesses' share of
abandonment and restoration costs for its two operating sulphur mines is
estimated to total approximately $50 million, $18.3 million of which had been
accrued at December 31, 1996, with essentially all costs being incurred after
mine closure. These estimates are by their nature imprecise and can be expected
to be revised over time because of changes in government regulations,
operations, technology and inflation.

A rollforward of the reclamation and mine shutdown reserves follows (in
thousands):

<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO OTHER - BALANCE AT
BEGINNING COSTS AND OTHER ADD END OF
OF PERIOD EXPENSE ACCOUNTS (DEDUCT) PERIOD
----------- ----------- ------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
1996
Sulphur......................... $ 83,145 $ 3,920 $ -- $ (11,147)a $ 75,918
Oil............................. 4,903 1,288 -- -- 6,191
----------- ----------- ----- ---------- -----------
$ 88,048 $ 5,208 $ -- $ (11,147)b $ 82,109
----------- ----------- ----- ---------- -----------
----------- ----------- ----- ---------- -----------
1995
Sulphur......................... $ 59,446 $ 2,643 $ -- $ 21,056a $ 83,145
Oil............................. 3,657 1,257 -- (11) 4,903
----------- ----------- ----- ---------- -----------
$ 63,103 $ 3,900 $ -- $ 21,045b $ 88,048
----------- ----------- ----- ---------- -----------
----------- ----------- ----- ---------- -----------
1994
Sulphur......................... $ 68,742 $ 1,041 $ -- $ (10,337) $ 59,446
Oil............................. 1,609 2,385 -- (337) 3,657
----------- ----------- ----- ---------- -----------
$ 70,351 $ 3,426 $ -- $ (10,674)b $ 63,103
----------- ----------- ----- ---------- -----------
----------- ----------- ----- ---------- -----------
</TABLE>

a. Includes $23.5 million of liabilities assumed in 1995 in connection with the
acquisition of the sulphur assets of Pennzoil Company which was subsequently
reduced by $8.3 million in 1996.

b. Includes expenditures of $7.5 million in 1996, $2.5 million in 1995 and
$11.2 million in 1994.

NEW ACCOUNTING STANDARDS. In June 1997, the FASB issued SFAS 130,
"Reporting Comprehensive Income," and SFAS 131, "Disclosures About Segments of
an Enterprise and Related Information." SFAS 130 establishes standards for the
reporting and display of comprehensive income in the financial statements.
Comprehensive income is the total of net income and all other nonowner changes
in equity. SFAS 131 requires that companies disclose segment data based on how
management makes decisions about allocating resources to segments and measuring
their performance. SFAS 130 and 131 are effective for 1998. Adoption of these
standards is not expected to result in material changes to the FRP Transferred
Businesses' financial statements, financial position or results of operations.

F-11
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3. PROPERTY PLANT AND EQUIPMENT, NET

The components of net property, plant and equipment of the FRP Transferred
Businesses follow (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1995
---------- ----------
<S> <C> <C>
Buildings and facilities.............................................. $ 480,562 $ 496,336
Capitalized oil exploration and development costs..................... 201,517 200,460
Capitalized interest and start-up costs............................... 132,850 132,850
Transportation, terminaling and other assets.......................... 97,395 99,960
Machinery and equipment............................................... 4,534 2,496
---------- ----------
Property, plant and equipment....................................... 916,858 932,102
Accumulated depreciation and amortization, including $192.5 million
and $179.2 million for 1996 and 1995, respectively, for capitalized
oil exploration and development costs............................... 381,205 357,073
---------- ----------
Property, plant and equipment, net.................................... $ 535,653 $ 575,029
---------- ----------
---------- ----------
</TABLE>

4. MANAGEMENT SERVICES

FTX has provided certain management and administrative services to FRP (and
thus the FRP Transferred Businesses) including technical, administrative,
accounting, financial, tax and other services under a management services
agreement. The costs of such services, which include related overhead, have been
allocated to the FRP Transferred Businesses based on time spent by FTX employees
in the conduct of the FRP Transferred Businesses' business activities. Such
costs are non-interest bearing and reimbursed monthly. Management believes the
costs for such services do not differ materially from the costs that would have
been incurred had the relevant personnel providing these services been employed
directly by the FRP Transferred Businesses. The total amount charged by FTX to
the FRP Transferred Businesses for such services was $2.0 million in 1996, $15.9
million in 1995 (including $7.0 million for stock appreciation rights costs
resulting from the rise in FTX's common stock price during the year) and $8.8
million in 1994.

Beginning in 1996, FM Services Company (FMS), an entity owned 50 percent
each by FTX and Freeport-McMoRan Copper & Gold Inc., a former subsidiary of FTX,
began providing most of the services previously provided by FTX on a similar
cost-reimbursement basis, totaling $6.7 million for 1996. Prior to 1997, FTX
operated the Main Pass oil facilities and charged the FRP Transferred Businesses
$1.3 million in 1996, $1.0 million in 1995 and $0.8 million in 1994 for
specified overhead and other costs. Beginning in 1997, FRP operated the
facilities and upon consummation of the Merger, Freeport Sulphur will operate
the Main Pass oil facilities.

After the Merger, FMS will continue to provide similar management and
administrative services to Freeport Sulphur pursuant to a management services
agreement. As a result, management believes general and administrative expenses
will not differ materially from those reported in these financial statements,
except that Freeport Sulphur will not have stock appreciation rights and it is
not possible to predict the impact of compensation expenses that are associated
with performance.

F-12
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES

Because FRP is not a taxable entity, historically it has not provided for
income taxes. Freeport Sulphur will record deferred income taxes pursuant to
SFAS 109 immediately upon the transfer of assets and liabilities and will
recognize the income tax effect of deferred taxes at that time. The components
of deferred taxes that would have been recorded by Freeport Sulphur as of
December 31, 1996 and 1995, based upon temporary differences existing at that
time, including the estimated deferred compensation, postretirement and pension
benefits related to the FRP Transferred Businesses, follow (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Deferred tax asset:
Reclamation and shutdown reserve.................................. $ 22,656 $ 21,743
Deferred compensation, postretirement and pension benefits........ 11,752 11,330
Other............................................................. 4,538 5,973
----------- -----------
Total deferred tax asset........................................ 38,946 39,046
----------- -----------
Deferred tax liability:
Property, plant and equipment..................................... (121,668) (110,908)
----------- -----------
Net deferred tax liability........................................ $ (82,722) $ (71,862)
----------- -----------
----------- -----------
</TABLE>

The estimated net deferred tax liability at December 31, 1996 shown above
does not reflect the impact of the sulphur impairment assessments discussed in
Note 2. These impairment assessments will result in Freeport Sulphur having an
estimated net deferred tax asset totaling approximately $62 million upon
transfer of assets and liabilities from FRP.

Unaudited pro forma income taxes consist of the following (in thousands):

<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Current....................................................... $ (6,201) $ 4,942 $ (9,520)
Deferred...................................................... 10,860 1,903 12,211
--------- --------- ---------
$ 4,659 $ 6,845 $ 2,691
--------- --------- ---------
--------- --------- ---------
</TABLE>

F-13
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. INCOME TAXES (CONTINUED)
Unaudited reconciliations of the differences between pro forma income taxes
computed at the federal statutory tax rate and pro forma income taxes recorded
follow (dollars in thousands):

<TABLE>
<CAPTION>
1996 1995 1994
------------------------ ---------------------- ------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
--------- ------------- --------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Pro forma income taxes computed at
the federal statutory tax rate... $ 4,337 35% $ 8,757 35% $ 2,500 34%
Increase (decrease) attributable
to:
Statutory depletion................ -- -- (2,385) (10) -- --
State taxes........................ 322 3 473 2 191 3
-- -- --
--------- --------- ---------
Pro forma income taxes............. $ 4,659 38% $ 6,845 27% $ 2,691 37%
-- -- --
-- -- --
--------- --------- ---------
--------- --------- ---------
</TABLE>

6. PENSION AND OTHER EMPLOYEE BENEFITS

PENSIONS. Substantially all employees have been covered by FTX's or FMS's
defined benefit plans. Additionally, unfunded nonqualified plans are sponsored
for those participants in the qualified defined benefit plans whose benefits are
limited under federal income tax laws. The accumulated benefits and plan assets
were not separately determined and amounts allocated to the FRP Transferred
Businesses under these plans have not been material. In connection with the
Merger, Freeport Sulphur will form its own defined benefit plans and FTX will
transfer to the new Freeport Sulphur plan (for the qualified plan), or to
Freeport Sulphur (for the nonqualified plan), assets and liabilities pertaining
to those FTX employees who will become Freeport Sulphur employees. The Freeport
Sulphur plans initially will have substantially the same provisions as the FTX
plans and will provide credit for prior FTX service. The final actuarial
valuation will be made as of the date of the consummation of the Merger. The
estimated actuarial liability related to the new Freeport Sulphur plans as of
January 1, 1998 follows (in thousands) and is not included in the FRP
Transferred Businesses balance sheets.

<TABLE>
<S> <C>
Accumulated Benefit Obligation..................................... $ 11,299
---------
---------
Projected Benefit Obligation (PBO)................................. $ 13,300
Less Plan assets................................................... 15,500
---------
Overfunded PBO................................................... (2,200)
Unrecognized amounts:
Transition asset................................................. 170
Prior service credit............................................. 7,829
Gains............................................................ 4,856
---------
Accrued pension liability.......................................... $ 10,655
---------
---------
</TABLE>

OTHER POSTRETIREMENT BENEFITS. FTX and FMS provide certain health care and
life insurance benefits for retired employees. The related expense allocated to
the FRP Transferred Businesses from FTX totaled $2.5 million in 1996 (including
$0.2 million for service cost and $2.3 million in interest for prior period

F-14
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. PENSION AND OTHER EMPLOYEE BENEFITS (CONTINUED)
services), $4.7 million in 1995 ($0.2 million and $4.5 million, respectively)
and $4.3 million in 1994 ($0.2 million and $4.1 million, respectively). The FRP
Transferred Businesses' share of the FMS plan was not significant for 1996.

In connection with the Merger, Freeport Sulphur will assume the liability
for the portion of FTX's postretirement benefit liability related to active
employees transferred to Freeport Sulphur and FTX will pay Freeport Sulphur cash
for the amount of the liability. The final actuarial determination will be made
upon consummation of the Merger. The estimated actuarial information as of
January 1, 1998 follows (in thousands) and neither the liability nor the cash
payment is included in the FRP Transferred Businesses balance sheets:

<TABLE>
<S> <C>
Accumulated postretirement benefits................................. $ 2,858
Unrecognized prior service credits.................................. 662
Unrecognized gains.................................................. 1,425
---------
Accrued postretirement liability.................................... $ 4,945
---------
---------
</TABLE>

The initial health care cost trend rate used was 8 percent for 1998,
decreasing 0.5 percent per year until reaching 5 percent. A one percent increase
in the trend rate would increase the amounts by approximately 10 percent. The
discount rate used was 7.75 percent. Freeport Sulphur will have the right to
modify or terminate these benefits.

In connection with the Merger, Freeport Sulphur will assume a liability to
IGL for a portion of IGL's postretirement benefit costs relating to certain
retired employees of FTX. An actuarial determination will be made of the
liability associated with these employees upon consummation of the Merger.
Freeport Sulphur estimates the liability to be approximately $10 million.

STOCK OPTIONS. Freeport Sulphur will adopt an Adjusted Stock Award Plan to
provide for the issuance of fixed options to holders of FTX fixed options and
FTX stock appreciation rights (SARs). The fixed options granted under the
Adjusted Stock Award Plan will reflect the option holder's economic position
under the FTX options as adjusted for the proportionate market value of Freeport
Sulphur shares at the time of the Merger. The number of fixed options to be
issued by Freeport Sulphur will be based upon the number of FTX options and SARs
outstanding as of the date of consummation of the Merger, adjusted for the
distribution ratio of Freeport Sulphur shares to FTX shares. As of December 31,
1996, FTX had outstanding a total of 2.1 million fixed options and SARs, of
which stock options representing 0.9 million shares were exercisable at an
average option price of $19.01 per share. Compensation expense for the aggregate
intrinsic value of the FTX SARs has already been recorded in the accompanying
FRP Transferred Businesses financial statements through allocations of general
and administrative costs from FTX. As these SARs will be converted to fixed
options under the Freeport Sulphur Adjusted Stock Award Plan, the related
accrued SAR liability will be recorded as additional paid-in capital in the
Freeport Sulphur balance sheets.

Freeport Sulphur will adopt the disclosure only provisions of SFAS 123 and
will continue to apply APB Opinion No. 25 and related interpretations in
accounting for its stock based compensation plans. Had compensation cost for
FTX's fixed stock option grants been determined in accordance with SFAS 123, the
FRP Transferred Businesses would have been allocated additional charges totaling
$1.2 million ($0.7 million to pro forma net income) in 1996 and none in 1995.

F-15
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. PENSION AND OTHER EMPLOYEE BENEFITS (CONTINUED)
Freeport Sulphur will adopt other benefit plans, certain of which are
related to its performance, which costs will be recognized in general and
administrative expense. Upon consummation of the Merger, Freeport Sulphur will
also assume certain FTX liabilities totaling approximately $0.4 million under
its plans related to those employees transferred from FTX to Freeport Sulphur in
exchange for an equal cash payment.

7. COMMITMENTS AND CONTINGENCIES

LONG-TERM CONTRACTS AND OPERATING LEASES. FRP Transferred Businesses'
minimum annual contractual charges under noncancelable long-term contracts and
operating leases total $176.9 million, with $18.2 million in 1997, $14.0 million
in 1998, $13.6 million in 1999, $13.5 million in 2000 and $13.4 million in 2001.

ENVIRONMENTAL. The FRP Transferred Businesses have made, and will continue
to make, expenditures for protection of the environment. The FRP Transferred
Businesses are subject to contingencies as a result of environmental laws and
regulations. The related future cost is indeterminable because of such factors
as the unknown timing and extent of the corrective actions that may be required
and the application of joint and several liability.

8. ACQUISITIONS

In January 1995, FRP acquired essentially all of the domestic assets of
Pennzoil Co.'s sulphur division, including the Culberson sulphur mine in West
Texas. Under the terms of the purchase, Pennzoil will receive quarterly payments
from FRP over 20 years based on the prevailing price of sulphur. These payments
totaled $2.0 million in 1996 and $5.2 million in 1995. The installment payments
may be terminated earlier either by FRP through the exercise of a $65 million
call option or by Pennzoil through the exercise of a $10 million put option.
Neither option may be exercised prior to 1999. Freeport Sulphur will assume the
terms of the purchase agreement with Pennzoil. The purchase price allocation
follows (in thousands):

<TABLE>
<S> <C>
Current assets.................................................... $ 5,635
Property, plant and equipment..................................... 48,837
Current liabilities............................................... (7,499)
Reclamation and mine shutdown reserves............................ (15,200)
Accrued long-term liabilities..................................... (31,773)
---------
Net cash investment............................................... $ --
---------
---------
</TABLE>

Accrued long-term liabilities include the estimated future installment
payments based on the prevailing sulphur price at the time of acquisition.

9. BUSINESS SEGMENTS

FRP Transferred Businesses operates in two business segments, sulphur and
oil. Frasch sulphur is produced through the offshore Louisiana Main Pass mine
and the Culberson mine in West Texas. The sulphur business segment also includes
an extensive logistics network, including sulphur terminaling and

F-16
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. BUSINESS SEGMENTS (CONTINUED)
transportation assets, and purchases of recovered sulphur. Oil is produced at
Main Pass from the same geologic formation that holds the deposit's sulphur.

A significant portion of the sulphur production is sold to the IMC-Agrico
Joint Venture (IMC-Agrico), a chemical fertilizer producer jointly owned by IGL
and FRP, under a long-term supply contract that extends for as long as
IMC-Agrico's operations have a requirement for sulphur. As a percentage of total
FRP Transferred Businesses revenues, sales to IMC-Agrico totaled 54% in 1996,
54% in 1995 and 58% in 1994. Oil produced from Main Pass is sold to two major
Gulf Coast refining companies. As a percentage of total FRP Transferred
Businesses revenues, oil sales to one of these refining companies, Amoco,
totaled 12% in 1996, 11% in 1995 and 19% in 1994. No other single customer
accounted for greater than 10% of total revenues in 1994 through 1996. The
Company's definition of its business segments is not expected to change as a
result of the adoption of SFAS 131.

<TABLE>
<CAPTION>
SULPHUR OIL TOTAL
---------- --------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
1996
Revenues................................................... $ 184,425 $ 37,001 $ 221,426
Production and delivery.................................... 150,086 10,896 160,982
Depreciation and amortization.............................. 23,006 14,794 37,800
General and administrative expense......................... 8,040 2,212 10,252
---------- --------- ----------
Net income................................................. $ 3,293 $ 9,099 $ 12,392
---------- --------- ----------
---------- --------- ----------
Capital expenditures....................................... $ 2,777 $ 1,057 $ 3,834
---------- --------- ----------
---------- --------- ----------
Total assets............................................... $ 612,051 $ 21,569 $ 633,620
---------- --------- ----------
---------- --------- ----------
1995
Revenues................................................... $ 220,796 $ 35,153 $ 255,949
Production and delivery.................................... 158,703 9,801 168,504
Depreciation and amortization.............................. 24,564 19,136 43,700
General and administrative expense......................... 14,489 4,236 18,725
---------- --------- ----------
Net income................................................. $ 23,040 $ 1,980 $ 25,020
---------- --------- ----------
---------- --------- ----------
Capital expenditures....................................... $ 2,148 $ 1,562 $ 3,710
---------- --------- ----------
---------- --------- ----------
Total assets............................................... $ 647,650 $ 32,817 $ 680,467
---------- --------- ----------
---------- --------- ----------
1994
Revenues................................................... $ 116,908 $ 34,887 $ 151,795
Production and delivery.................................... 84,530 9,858 94,388
Depreciation and amortization.............................. 21,397 18,534 39,931
General and administrative expense......................... 6,711 3,412 10,123
---------- --------- ----------
Net income................................................. $ 4,270 $ 3,083 $ 7,353
---------- --------- ----------
---------- --------- ----------
Capital expenditures....................................... $ 1,827 $ 9,404 $ 11,231
---------- --------- ----------
---------- --------- ----------
Total assets............................................... $ 593,829 $ 44,073 $ 637,902
---------- --------- ----------
---------- --------- ----------
</TABLE>

F-17
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

10. SUPPLEMENTARY MINERAL RESERVE INFORMATION (UNAUDITED)

Proved and probable mineral reserves follow:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Sulphur-long tons (a)........................ 53,149 55,185 41,018 38,637 41,570
</TABLE>

- ------------------------

(a) Main Pass reserves are subject to a 12.5 percent royalty based on net mine
revenues. Culberson reserves totaled 14.5 million tons at December 31, 1996
and 15.4 million tons at December 31, 1995 and are subject to a 9 percent
royalty based on net mine revenues. Subsequent to December 31, 1996,
Culberson reserves were revised downward to approximately 8 million tons to
reflect recent production history.

11. SUPPLEMENTARY OIL INFORMATION

The supplementary information presented below is prepared in accordance with
requirements prescribed by the Financial Accounting Standards Board. Information
regarding capitalized oil exploration and development costs is included in Note
3.

Costs Incurred In Oil Property Acquisition, Exploration and Development
Activities.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------
1996 1995 1994
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Acquisition of properties
Proved......................................................... $ -- $ -- $ --
Unproved....................................................... -- -- --
Exploration costs................................................ -- -- --
Development costs................................................ 1,057 1,562 9,404
--------- --------- ---------
$ 1,057 $ 1,562 $ 9,404
--------- --------- ---------
--------- --------- ---------
</TABLE>

PROVED OIL RESERVES (UNAUDITED). Proved oil reserves at December 31, 1996,
have been estimated by independent petroleum engineers in accordance with
guidelines established by the Securities and Exchange Commission (SEC). There
are numerous uncertainties inherent in estimating quantities of proved reserves
and in projecting the future rates of production and timing of development
expenditures. Thus, the following reserve estimates, which relate to reserves
attributable to the FRP Transferred Businesses, are based upon existing economic
and operating conditions; they are only estimates and should not be construed as
being exact. The reserves related to the FRP Transferred Businesses are located
in

F-18
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. SUPPLEMENTARY OIL INFORMATION (CONTINUED)
offshore United States waters. Oil, including condensate and plant products, is
stated in thousands of barrels.

<TABLE>
<CAPTION>
OIL
-------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Proved reserves:
Beginning of year........................................... 6,638 7,279 9,962
Revisions of previous estimates............................. 446 1,577 (149)
Production.................................................. (1,896) (2,218) (2,534)
--------- --------- ---------
End of year................................................. 5,188 6,638 7,279
--------- --------- ---------
--------- --------- ---------
Proved developed reserves:
End of year................................................. 4,108 5,155 5,383
--------- --------- ---------
--------- --------- ---------
</TABLE>

Subsequent to December 31, 1996, proved undeveloped reserve estimates were
revised downward by approximately 1 million barrels to reflect recent drilling
results.

STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM PROVED OIL
RESERVES (UNAUDITED). The standardized measure of discounted future net cash
flows and changes therein relating to the proved oil reserves of the FRP
Transferred Businesses were computed using reserve valuations based on
regulations prescribed by the SEC. These regulations provide for the use of
current oil prices (escalated only when known and determinable price changes are
provided by contract and law) in the projection of future net cash flows.

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Future cash flows........................................ $ 107,118 $ 113,231 $ 107,485
Future costs applicable to future cash flows:
Production costs....................................... 47,114 39,720 33,588
Development and abandonment costs...................... 18,727 17,971 22,932
---------- ---------- ----------
Future net cash flows before income taxes................ 41,277 55,540 50,965
Future income taxes...................................... -- -- --
---------- ---------- ----------
Future net cash flows.................................... 41,277 55,540 50,965
Discount for estimated timing of net cash flows
(10% discount rate).................................... 2,323 6,787 5,315
---------- ---------- ----------
$ 38,954 $ 48,753 $ 45,650
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Because Freeport Sulphur will have sufficient tax deductions to utilize
against estimated future taxable income, in accordance with SFAS 69 no
deductions for future income taxes have been made above.

F-19
<PAGE>
FRP TRANSFERRED BUSINESSES

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

11. SUPPLEMENTARY OIL INFORMATION (CONTINUED)
CHANGES IN STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM
PROVED OIL RESERVES (UNAUDITED).

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
Beginning of year......................................... $ 48,753 $ 45,650 $ 43,498
Revisions:
Changes in prices....................................... 7,316 8,841 33,165
Accretion of discount................................... 4,875 4,565 4,350
Other changes (primarily revised estimates of
development costs in 1994 and reserve quantities in
1995)................................................. 3,058 13,487 (19,738)
Development costs incurred during the year................ 1,057 1,562 9,404
Revenues, less production costs........................... (26,105) (25,352) (25,029)
---------- ---------- ----------
End of year............................................... $ 38,954 $ 48,753 $ 45,650
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Oil prices have declined subsequent to December 31, 1996. The future cash
flows from proved reserves presented above do not reflect the decline.

F-20
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
---------------------------------------
FRP IGL
TRANSFERRED TRANSFERRED
FREEPORT BUSINESSES BUSINESSES OTHER
SULPHUR (NOTE 1) (NOTE 1) (NOTE 2) PRO FORMA
----------- ----------- ----------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ -- $ 2,572 $ 1,640 $ 8,280a $ 12,492
Accounts receivable............................... -- 33,338 -- 1,137b 34,475
Inventories....................................... -- 33,335 2,702 2,366c 38,403
Prepaid expenses and other........................ -- 2,117 -- -- 2,117
----------- ----------- ----------- ------------- -----------
Total current assets............................ -- 71,362 4,342 11,783 87,487
----------- ----------- ----------- ------------- -----------
Property, plant and equipment..................... -- 918,870 21,900 -- 940,770
Less accumulated depreciation and amortization.... -- 826,308 -- -- 826,308
----------- ----------- ----------- ------------- -----------
Net property, plant and equipment................. -- 92,562 21,900 -- 114,462
----------- ----------- ----------- ------------- -----------
Other assets...................................... -- 14,657 -- 61,538d 76,195
----------- ----------- ----------- ------------- -----------
Total assets...................................... $ -- $ 178,581 $ 26,242 $ 73,321 $ 278,144
----------- ----------- ----------- ------------- -----------
----------- ----------- ----------- ------------- -----------

LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities............................... $ -- $ 44,157 $ 3,052 $ (3,099)e $ 44,110
Reclamation and mine shutdown reserves............ -- 61,055 5,152 -- 66,207
Accrued postretirement benefits and other
liabilities..................................... -- 33,459 -- 26,691a 60,150
Net assets to be transferred...................... -- 39,910 18,038 (57,948) --
Stockholder's equity.............................. -- -- -- 107,677 107,677
----------- ----------- ----------- ------------- -----------
Total liabilities and stockholder's equity........ $ -- $ 178,581 $ 26,242 $ 73,321 $ 278,144
----------- ----------- ----------- ------------- -----------
----------- ----------- ----------- ------------- -----------
</TABLE>

The accompanying notes are an integral part of these pro forma financial
statements.

F-21
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
------------------------------------------
FRP IGL
TRANSFERRED TRANSFERRED
FREEPORT BUSINESSES BUSINESSES OTHER
SULPHUR (NOTE 1) (NOTE 1) (NOTE 2) PRO FORMA
----------- ----------- ----------- ---------------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<S> <C> <C> <C> <C> <C>
Revenues...................................... $ -- $ 158,304 $ 34,190 $ (1,984)f $ 190,510
Cost of sales:
Production and delivery....................... -- 126,328 24,159 (409)f,g 150,078
Depreciation and amortization................. -- 451,639 -- 2,468h 454,107
----------- ----------- ----------- ---------------- -----------
Total cost of sales......................... -- 577,967 24,159 2,059 604,185
General and administrative expenses........... -- 5,508 -- 3,000i 8,508
----------- ----------- ----------- ---------------- -----------
Total costs and expenses.................... -- 583,475 24,159 5,059 612,693
----------- ----------- ----------- ---------------- -----------
Net income (loss) before income taxes......... -- (425,171) 10,031 (7,043) (422,183)
Income tax benefit............................ -- 155,613 -- (1,094)j 154,519
----------- ----------- ----------- ---------------- -----------
Net income (loss)............................. $ -- $ (269,558) $ 10,031 $ (8,137) $ (267,664)
----------- ----------- ----------- ---------------- -----------
----------- ----------- ----------- ---------------- -----------
Average shares outstanding.................... 10,390
-----------
-----------
Net income (loss) per share................... $ (25.76)
-----------
-----------
</TABLE>

The accompanying notes are an integral part of these pro forma financial
statements.

F-22
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

PRO FORMA STATEMENT OF INCOME

YEAR ENDED DECEMBER 31, 1996

(UNAUDITED)

<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
------------------------------------
FRP IGL
TRANSFERRED TRANSFERRED
FREEPORT BUSINESSES BUSINESSES OTHER
SULPHUR (NOTE 1) (NOTE 1) (NOTE 2) PRO FORMA
----------- ----------- ----------- ---------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<S> <C> <C> <C> <C> <C>
Revenues.......................................... $ -- $ 221,426 $ 50,337 $ (2,844)f $ 268,919
Cost of sales:
Production and delivery........................... -- 160,982 30,414 (2,644 f,g 188,752
Depreciation and amortization..................... -- 37,800 -- 3,200h 41,000
----- ----------- ----------- ---------- -----------
Total cost of sales............................. -- 198,782 30,414 556 229,752
General and administrative expenses............... -- 10,252 -- 3,589i 13,841
----- ----------- ----------- ---------- -----------
Total costs and expenses........................ -- 209,034 30,414 4,145 243,593
----- ----------- ----------- ---------- -----------
Net income before income taxes.................... -- 12,392 19,923 (6,989) 25,326
Provision for income taxes........................ -- (4,659) -- (4,864)j (9,523)
----- ----------- ----------- ---------- -----------
Net income........................................ $ -- $ 7,733 $ 19,923 $ (11,853) $ 15,803
----- ----------- ----------- ---------- -----------
----- ----------- ----------- ---------- -----------
Average shares outstanding........................ 10,409
-----------
-----------
Net income per share.............................. $ 1.52
-----------
-----------
</TABLE>

The accompanying notes are an integral part of these pro forma financial
statements.

F-23
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS

The accompanying Pro Forma Statements of Income have been prepared assuming the
transaction discussed below occurred on January 1, 1996, whereas the Pro Forma
Condensed Balance Sheet assumes the transaction occurred on September 30, 1997.
The pro forma financial statements are not necessarily indicative of the results
that would have been achieved nor are they indicative of future results.

1. FRP TRANSFERRED BUSINESSES AND IGL TRANSFERRED BUSINESSES

BACKGROUND. On August 26, 1997, IMC Global Inc. ("IGL") and
Freeport-McMoRan Inc. ("FTX") executed a definitive agreement for FTX to merge
with and into IGL (the "Merger"). The terms of the Merger provide that each
share of FTX common stock will be converted into the right to receive (i) 0.90
of a share of IGL common stock, (ii) one-third of a warrant exercisable for a
share of IGL common stock and (iii) a proportionate number of shares of a newly
formed company (Freeport-McMoRan Sulphur Inc.) that would be held by FTX
immediately prior to consummation of the Merger. Completion of the Merger is
subject to, among other things, approval of the definitive merger agreement by
the IGL and FTX shareholders and the expiration or early termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(early termination having been granted). Both companies expect the Merger to be
completed by the end of 1997.

In connection with the Merger, Freeport-McMoRan Resource Partners, Limited
Partnership, a Delaware limited partnership that is 51.6% owned by FTX ("FRP"),
will contribute to Freeport-McMoRan Sulphur Inc. ("Freeport Sulphur"), a newly
formed subsidiary of FRP, certain assets and liabilities described below and the
shares of Freeport Sulphur will be distributed to the FRP unitholders, including
FTX. FTX will then distribute its Freeport Sulphur shares to its stockholders as
part of the Merger consideration.

Among the assets that will be contributed by FRP to Freeport Sulphur is
FRP's 58.3% interest in the Main Pass sulphur and oil joint venture (the "Main
Pass Joint Venture") in which IGL also has a 25% interest. The Main Pass Joint
Venture is primarily a sulphur mining operation, with the related oil deposit
being located in the same caprock containing the sulphur reserves.

Immediately prior to the Merger, IGL will transfer its 25% interest in the
Main Pass Joint Venture to FRP (the "IGL Transferred Businesses"). FRP will then
contribute to Freeport Sulphur the IGL Transferred Businesses, and the FRP
Transferred Business; including FRP's interest in the Main Pass Joint Venture,
FRP's Culberson sulphur mine in West Texas (acquired from Pennzoil Company in
1995) and various related sulphur terminaling and transportation assets in the
Gulf Coast area.

The pro forma balance sheet information reflects the pro forma effects of
the contribution of the assets and liabilities attributable to the FRP
Transferred Businesses and the IGL Transferred Businesses, reflected at
September 30, 1997 historical cost. While no consideration will actually be paid
by FRP to IGL for the IGL Transferred Businesses, the receipt of the IGL
Transferred Businesses will be recorded by FRP at fair value. The estimated fair
value of the property, plant and equipment to be contributed by IGL was based on
the same assumptions applied in the impairment assessment of FRP's sulphur
assets as discussed in Note 3. The pro forma income statement information
reflects the pro forma results of the FRP Transferred Businesses and the
historical revenues and direct operating expenses of the IGL Transferred
Businesses for the periods presented.

2. OTHER ADJUSTMENTS

a. Upon consummation of the Merger, FTX will (i) reimburse Freeport Sulphur
$6.3 million for certain employee benefits obligations totaling $26.7 million
which Freeport Sulphur will assume relating to

F-24
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)

2. OTHER ADJUSTMENTS (CONTINUED)
transferred employees who will become Freeport Sulphur employees and (ii)
establish an operating cash balance of $2.0 million for ongoing Freeport Sulphur
operations.

b. Reflects estimated IGL Transferred Businesses customer receivable
balance ($2.9 million) for its share of sulphur production taken in-kind less
intercompany balances.

c. Reflects estimated sulphur and oil inventory balances attributable to
the IGL Transferred Businesses.

d. Reflects net deferred tax asset associated with differences in book and
tax asset and liability bases as per Statement of Financial Accounting Standards
No. 109 (SFAS 109) after giving effect to the impairment assessment of FRP's
sulphur assets discussed in Note 3.

e. Reflects reductions in accounts payable related to amounts to be settled
by IGL pursuant to the Merger and intercompany balances.

f. Reflects elimination of management and similar fees charged IGL by FRP
as operator of the Main Pass Joint Venture.

g. Reflects estimated $1.0 million annual increase in insurance cost
related to the IGL Transferred Businesses and an estimated reduction in employee
benefit costs.

h. Reflects estimated depreciation and amortization, including reclamation
and shutdown reserve accruals, for the IGL Transferred Businesses based on their
proportionate share of future costs and the estimated fair value of the
property, plant and equipment to be contributed by IGL to FRP.

i. Reflects estimated identifiable increase in Freeport Sulphur general and
administrative expenses relative to public entity-related costs ($1.05 million
annually) and estimated general and administrative expenses attributable to the
IGL Transferred Businesses which were previously recovered from IGL.

j. Reflects estimated applicable income tax provision associated with the
IGL Transferred Businesses and other pro forma income statement adjustments.

3. IMPAIRMENT ASSESSMENT OF SULPHUR ASSETS.

In 1995, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 121 (SFAS 121) which requires an assessment
of the carrying value of long-lived assets and a reduction of such carrying
value to fair value when events or changes in circumstances indicate that the
carrying amount may not be recoverable. As a result of its most recent review of
its sulphur assets, FRP and FTX concluded that the carrying value of the Main
Pass sulphur assets exceeded the undiscounted estimated future net cash flows,
such that an impairment writedown of $416.4 million (based on September 30, 1997
book values) was required. A similar analysis of the Culberson sulphur assets,
based on a reassessment of recoverable reserves utilizing recent production
history, also indicated an impairment writedown of $9.0 million (based on
September 30, 1997 book values) was required. Fair values were estimated using
discounted estimated future cash flows related to these assets and the
writedowns are reflected in the pro forma September 30, 1997 financial
statements as additional accumulated depreciation and amortization charges. The
writedowns to fair value were recorded by FRP and FTX in the third quarter of
1997.

F-25
<PAGE>
FREEPORT-MCMORAN SULPHUR INC.

NOTES TO PRO FORMA FINANCIAL STATEMENTS (CONTINUED)

4. PRO FORMA EARNINGS PER SHARE.

Pro forma earnings per share is computed by dividing pro forma net income by
pro forma common and common equivalent shares outstanding. Pro forma common and
common equivalent shares are based on the number of Freeport Sulphur shares
expected to be issued and outstanding (10,346,578) and the expected number of
common stock equivalents under the Freeport Sulphur Adjusted Stock Award Plan.
In February 1997, the FASB issued SFAS 128, "Earnings Per Share," which
simplifies the computation of earnings per share (EPS). SFAS 128 is effective
for financial statements issued for periods ending after December 15, 1997 and
requires restatement for all prior period EPS data presented. Adoption of SFAS
128 would not change Freeport Sulphur's pro forma EPS.

F-26
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Freeport-McMoRan Sulphur Inc.:

We have audited the accompanying statement of gross sulphur and oil revenues
and direct operating expenses of the assets to be acquired (IGL Transferred
Businesses) by Freeport-McMoRan Sulphur Inc. (see Note 1) for the year ended
December 31, 1996. This statement is the responsibility of management. Our
responsibility is to express an opinion on the statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the statements. We
believe our audit provides a reasonable basis for our opinion.

The accompanying statement presents only the gross sulphur and oil revenues
and direct operating expenses (see Note 1) and are not intended to be a complete
presentation of the revenues and expenses of the Contributed Assets.

In our opinion, the statement referred to above presents fairly, in all
material respects, the gross sulphur and oil revenues and direct operating
expenses of the IGL Transferred Businesses for the year ended December 31, 1996
in conformity with generally accepted accounting principles.

Arthur Andersen LLP

New Orleans, Louisiana,
September 16, 1997

F-27
<PAGE>
The following statement of gross sulphur and oil revenues and direct
operating expenses of the assets to be acquired (IGL Transferred Businesses) by
Freeport-McMoRan Sulphur Inc. ("Freeport Sulphur") for the year ended December
31, 1996 have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their accompanying report. The statement is
presented to provide historical data about the IGL Transferred Businesses and
may not be indicative of future results of operations of the IGL Transferred
Businesses.

Separate financial statements for the IGL Transferred Businesses have never
been prepared. Depreciation, depletion and amortization has not been included
because the historical expenses incurred by the predecessor owner may not be
comparable to amounts to be incurred by Freeport Sulphur in future periods.
Further, it is not possible to make a practicable or objective determination of
the portion of general or administrative expenses or other indirect expenses
which were attributable to the IGL Transferred Businesses and any such
allocation would not be indicative of the level of such expenses to be incurred
in the future. In addition, a provision for income taxes has not been included
because the tax position of the predecessor owner will not affect Freeport
Sulphur's future tax provisions.

IGL TRANSFERRED BUSINESSES
STATEMENTS OF GROSS SULPHUR AND OIL REVENUES AND DIRECT OPERATING EXPENSES
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR
ENDED
DECEMBER 31,
1996
NINE MONTHS ------------
ENDED
SEPTEMBER 30,
1997
-------------
(UNAUDITED)
<S> <C> <C>
Sulphur and Oil sales........................................... $ 34,190 $ 50,337
Production and delivery......................................... 24,159 30,414
------------- ------------
Revenues over direct operating expenses......................... $ 10,031 $ 19,923
------------- ------------
------------- ------------
</TABLE>

See accompanying notes to financial statements.

F-28
<PAGE>
NOTES TO STATEMENTS OF GROSS SULPHUR AND OIL REVENUES

AND DIRECT OPERATING EXPENSES OF THE IGL TRANSFERRED BUSINESSES

1. BACKGROUND AND BASIS OF PRESENTATION

Immediately prior to the Merger, IGL will transfer its 25% interest in the
Main Pass Joint Venture to FRP (the "IGL Transferred Businesses"). FRP will then
contribute to Freeport Sulphur the IGL Transferred Businesses, and the FRP
Transferred Businesses; including FRP's interest in the Main Pass Joint Venture,
FRP's Culberson sulphur mine in West Texas (acquired from Pennzoil Company in
1995) and various related sulphur terminaling and transportation assets in the
Gulf Coast area.

BASIS OF PRESENTATION. The accompanying statement of gross sulphur and oil
revenues and direct operating expenses relates to the interests in IGL's
producing sulphur and oil properties described above and may not be
representative of future operations. The statement does not include federal and
state income taxes, interest, depreciation, depletion and amortization or
corporate general and administrative expenses because such amounts have
historically not been allocated to the IGL Transferred Businesses or such
amounts would not be indicative of those expenses which would be incurred by
Freeport Sulphur. The statement includes gross sulphur and oil revenues and
direct operating and production expenses, including production and ad valorem
taxes, for the entire periods presented.

With respect to Main Pass sulphur production, IGL takes its share of sulphur
in kind and sells such production under a long-term contract to the IMC-Agrico
Joint Venture (IMC-Agrico), a chemical fertilizer producer jointly owned by IGL
and FRP. The contract price paid by IMC-Agrico for approximately the first
500,000 tons is based on a fixed premium over the per ton weighted average cost
of IGL's purchases of sulphur on behalf of IMC-Agrico under other long-term
supply contracts and tons sold in excess of that amount exclude the fixed
premium.

The unaudited statement of gross sulphur and oil revenues and direct
operating expenses for the nine-month period ended September 30, 1997, in the
opinion of management, was prepared on a basis consistent with the audited
statement of gross sulphur and oil revenues and direct operating expenses and

F-29
<PAGE>
NOTES TO STATEMENTS OF GROSS SULPHUR AND OIL REVENUES (CONTINUED)

AND DIRECT OPERATING EXPENSES OF THE IGL TRANSFERRED BUSINESSES

1. BACKGROUND AND BASIS OF PRESENTATION (CONTINUED)
includes all adjustments (which includes normal recurring adjustments) necessary
to present fairly the gross sulphur and oil revenues and direct operating and
production expenses for this interim period and may not be indicative of future
revenues and expenses.

2. SUPPLEMENTAL INFORMATION ON SULPHUR AND OIL RESERVES (UNAUDITED)

Proved and probable sulphur mineral reserves at December 31, 1996 totaled
16.6 million long tons which are subject to a 12.5 percent royalty based on net
mine revenues.

The supplementary oil reserve information presented below is prepared in
accordance with requirements prescribed by the Financial Accounting Standards
Board. Proved oil reserves at December 31, 1996, have been estimated by
independent petroleum engineers in accordance with guidelines established by the
Securities and Exchange Commission (SEC). There are numerous uncertainties
inherent in estimating quantities of proved reserves and in projecting the
future rates of production and timing of development expenditures. Thus, the
following reserve estimates, which relate to reserves attributable to the IGL
Transferred Businesses, are based upon existing economic and operating
conditions; they are only estimates and should not be construed as being exact.
The reserves related to the IGL Transferred Businesses are located in offshore
United States waters. Oil, including condensate and plant products, is stated in
thousands of barrels. An analysis of the estimated changes in quantities of
proved oil reserves of the IGL Transferred Businesses for the year ended
December 31, 1996 is shown below.

<TABLE>
<CAPTION>
OIL
---------
<S> <C>
Proved reserves:
Beginning of year................................................................... 2,845
Revisions of previous estimates..................................................... 191
Discoveries and extensions.......................................................... --
Production.......................................................................... (813)
---------
End of period....................................................................... 2,223
---------
---------
Proved developed reserves:
End of year......................................................................... 1,761
---------
---------
</TABLE>

Subsequent to December 31, 1996, proved undeveloped reserve estimates were
revised downward by approximately 0.5 million barrels to reflect recent drilling
results.

The standardized measure of discounted future net cash flows and changes
therein relating to the proved oil reserves of the IGL Transferred Businesses
were computed using reserve valuations based on regulations prescribed by the
SEC. These regulations provide for the use of current oil prices (escalated only
when known and determinable price changes are provided by contract and law) in
the projection of

F-30
<PAGE>
NOTES TO STATEMENTS OF GROSS SULPHUR AND OIL REVENUES (CONTINUED)

AND DIRECT OPERATING EXPENSES OF THE IGL TRANSFERRED BUSINESSES

2. SUPPLEMENTAL INFORMATION ON SULPHUR AND OIL RESERVES (UNAUDITED) (CONTINUED)
future net cash flows. The estimated standardized measure of discounted future
net cash flows relating to proved reserves of the IGL Transferred Businesses at
December 31, 1996 is shown below (in thousands).

<TABLE>
<S> <C>
Future cash flows.................................................. $ 45,910
Future costs applicable to future cash flows:
Production costs................................................. 20,193
Development and abandonment costs................................ 8,027
---------
Future net cash flows before income taxes.......................... 17,690
Future income taxes --
---------
Future net cash flows.............................................. 17,690
Discount for estimated timing of net cash flows (10% discount
rate)............................................................ 995
---------
$ 16,695
---------
---------
</TABLE>

Because the tax position of the predecessor owner will not affect Freeport
Sulphur's future tax provisions, no deductions for future income taxes have been
made above. Oil prices have declined subsequent to December 31, 1996. The future
cash flows from proved reserves presented above do not reflect the decline.

An analysis of the sources of changes in the standardized measure of
discounted future net cash flows relating to proved reserves of the IGL
Transferred Businesses for the year ended December 31, 1996 is shown below (in
thousands).

<TABLE>
<S> <C>
Beginning of year.................................................. $ 20,895
Development costs incurred during the period....................... 453
Revisions:
Changes in prices................................................ 3,136
Accretion of discount............................................ 2,090
Other changes.................................................... 1,309
Revenues, less production costs.................................... (11,188)
---------
End of year........................................................ $ 16,695
---------
</TABLE>

F-31
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE FTX STOCKHOLDER DISTRIBUTION AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY THE SHARES OF COMMON STOCK DISTRIBUTED HEREBY BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
SOLICITATION OR OFFER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
DISTRIBUTION MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

--------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 10
The Merger and the Distributions.......................................... 16
Certain Federal Income Tax Consequences................................... 19
Dividend Policy........................................................... 23
Distributing Security Holder.............................................. 23
Capitalization............................................................ 23
Selected Financial and Operating Data..................................... 24
Selected Pro Forma Financial and Operating Data........................... 25
Management's Discussion and Analysis of Financial Condition and Results of
Operations.............................................................. 27
Business.................................................................. 31
Management................................................................ 45
Principal Stockholders.................................................... 55
Certain Transactions...................................................... 56
Description of Capital Stock.............................................. 57
Comparison of the Rights of Stockholders.................................. 63
Shares Eligible for Future Sale........................................... 64
Legal Matters............................................................. 64
Experts................................................................... 64
Available Information..................................................... 65
Index to Financial Statements............................................. F-1
</TABLE>

--------------------------

UNTIL DECEMBER 12, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THE FTX STOCKHOLDER DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF THE DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS.

5,338,513 SHARES

FREEPORT-MCMORAN
SULPHUR INC.

COMMON STOCK
($.01 PAR VALUE)

---------------------

PROSPECTUS

---------------------

November 17, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses payable in connection with the proposed FTX Stockholder
Distribution of Common Stock covered hereby are as follows:

<TABLE>
<S> <C>
SEC registration fee.............................................. $ 0
NYSE listing fee.................................................. 100,000
Printing expenses................................................. 135,000
Legal fees and expenses........................................... 150,000
Accounting fees and expenses...................................... 60,000
Distribution agent fees and expenses.............................. 75,000
Miscellaneous expenses............................................ 30,000
---------
Total expenses................................................ $ 550,000
---------
---------
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law (the "DGCL") provides
that a corporation may limit the liability of and indemnify its directors and
officers against liability in a variety of circumstances. In accordance with the
DGCL, the Company's Certificate of Incorporation contains provisions eliminating
the personal liability of the directors except for liability for (a) a breach of
his or her duty of loyalty to the Company or to its stockholders, (b) acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (c) dividends or stock repurchases or redemptions that are
unlawful under Delaware law and (d) any transaction from which he or she
receives an improper personal benefit. In addition, the Company's By-laws
require the Company to indemnify its officers and directors against expenses and
costs, judgments, settlements and fines incurred in the defense of any claim,
including any claim brought by or in the right of the Company, to which they
were made parties by reason of being or having been officers or directors.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

On August 26, 1997 the Company issued 100 shares of Common Stock to FRP in
exchange for $100.00 in cash. In connection with the Contribution, the Company
will issue an additional 10,346,478 shares to FRP in exchange for FRP's
contribution to the Company of the Transferred Businesses. All of the shares
issued to FRP in each of these transactions are being distributed in the
Distributions described in this Registration Statement.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

<TABLE>
<CAPTION>
EXHIBITS
<C> <S>
2.1 Contribution and Distribution Agreement by and among the Company, FTX and
FRP, dated as of August 26, 1997
2.2 Form of IGL Contribution Agreement
3.1 Certificate of Incorporation of the Company
3.2 By-laws of the Company
4.1 Form of the Company's Common Stock certificate
5.1 Opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.
8.1 Opinion of Miller & Chevalier, Chartered
10.1 Form of Employee Benefits Agreement by and between FTX and the Company
</TABLE>

II-1
<PAGE>

<TABLE>
<CAPTION>
EXHIBITS
<C> <S>
10.2 Asset Sale Agreement for Main Pass Block 299 between FRP and Chevron USA,
Inc. dated as of May 2, 1990
10.3 Main Pass 299 Sulphur and Salt Lease, effective May 1, 1988
10.4 Joint Operating Agreement by and between FRP, IMC-Fertilizer, Inc. and
Felmont Oil Corporation, dated June 5, 1990
10.5 Joint Operating Agreement by and between FRP, IMC-Fertilizer, Inc. and
Felmont Oil Corporation, dated May 1, 1988
10.6 Agreement to Coordinate Operating Agreements by and between FRP,
IMC-Fertilizer and Felmont Oil Corporation, dated May 1, 1988
10.7 Asset Purchase Agreement between FRP and Pennzoil Company dated as of
October 22, 1994 (the "Asset Purchase Agreement")
10.8 Amendment No. 1 to the Asset Purchase Agreement dated as of January 3,
1995
10.9 Agreement for Sulphur Supply, as amended, dated as of July 1, 1993 among
FRP, IMC Fertilizer and IMC-Agrico Company (the "Sulphur Supply
Agreement")*
10.10 Side letter with IGL regarding the Sulphur Supply Agreement
10.11 Processing and Marketing Agreement between the Freeport Sulphur Company (a
division of FRP) and Felmont Oil Corporation dated June 19, 1990 (the
"Processing Agreement")
10.12 Amendment Number 1 to the Processing Agreement
10.13 Amendment Number 2 to the Processing Agreement
10.14 1997 Stock Option Plan for Non-Employee Directors
10.15 Company Adjusted Stock Award Plan
10.16 Freeport Sulphur 1997 Stock Option Plan
10.17 Form of Stockholder Protection Rights Agreement between Freeport-McMoRan
Sulphur Inc. and Mellon Securities Trust Company, as Rights Agent
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Ryder Scott Company
23.3 Consent of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.
(included in Exhibit 5.1)
23.4 Consent of Miller & Chevalier, Chartered (included in Exhibit 8.1)
23.5 Consent of Valuation Research Corporation (included in Exhibit 99.1)
24.1 Powers of Attorney
27.1 Financial Data Schedule
99.1 Solvency Opinion of Valuation Research Corporation
</TABLE>

- ------------------------

* Portions of this Exhibit have been omitted pursuant to a confidentiality
request filed with the Commission.

II-2
<PAGE>
(B) FINANCIAL STATEMENT SCHEDULES

None.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the 1933 Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 14 above, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the 1933 Act, the Registrant has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New Orleans, State of Louisiana, on
November 14, 1997.

<TABLE>
<S> <C> <C>
FREEPORT-MCMORAN SULPHUR INC.

By: /s/ ROBERT M. WOHLEBER
-----------------------------------------
Robert M. Wohleber,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
</TABLE>

Pursuant to the requirements of the 1933 Act, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.

SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------

*
- ------------------------------ Co-Chairman of the Board November 14, 1997
James R. Moffett of Directors

*
- ------------------------------ Co-Chairman of the Board November 14, 1997
Rene L. Latiolais of Directors

*
- ------------------------------ Vice Chairman of the Board November 14, 1997
Richard C. Adkerson of Directors

President, Chief Executive
/s/ ROBERT M. WOHLEBER Officer and a Director
- ------------------------------ (Principal Executive, November 14, 1997
Robert M. Wohleber Financial and Accounting
Officer)

*
- ------------------------------ Director November 14, 1997
J. Terrell Brown

*
- ------------------------------ Director November 14, 1997
Thomas D. Clark, Jr.

*
- ------------------------------ Director November 14, 1997
B. M. Rankin, Jr.

*By: /s/ ROBERT M. WOHLEBER
-------------------------
Robert M. Wohleber
ATTORNEY-IN-FACT

S-1
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION OF EXHIBITS NUMBERED PAGE
- ----------- --------------------------------------------------------------------------------------- -----------------
<C> <S> <C>
2.1 Contribution and Distribution Agreement by and among the Company, FTX and FRP, dated as
of August 26, 1997

2.2 Form of IGL Contribution Agreement

3.1 Certificate of Incorporation of the Company

3.2 By-laws of the Company

4.1 Form of the Company's Common Stock certificate

5.1 Opinion of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P.

8.1 Opinion of Miller & Chevalier, Chartered

10.1 Form of Employee Benefits Agreement by and between FTX and the Company

10.2 Asset Sale Agreement for Main Pass Block 299 between FRP and Chevron USA, Inc. dated as
of May 2, 1990

10.3 Main Pass 299 Sulphur and Salt Lease, effective May 1, 1988

10.4 Joint Operating Agreement by and between FRP, IMC-Fertilizer, Inc. and Felmont Oil
Corporation, dated June 5, 1990

10.5 Joint Operating Agreement by and between FRP, IMC-Fertilizer, Inc. and Felmont Oil
Corporation, dated May 1, 1988

10.6 Agreement to Coordinate Operating Agreements by and between FRP, IMC-Fertilizer and
Felmont Oil Corporation, dated May 1, 1988

10.7 Asset Purchase Agreement between FRP and Pennzoil Company dated as of October 22, 1994
(the "Asset Purchase Agreement")

10.8 Amendment No. 1 to the Asset Purchase Agreement dated as of January 3, 1995

10.9 Agreement for Sulphur Supply, as amended, dated as of July 1, 1993 among FRP, IMC
Fertilizer and IMC-Agrico Company (the "Sulphur Supply Agreement")*

10.10 Side letter with IGL regarding the Sulphur Supply Agreement

10.11 Processing and Marketing Agreement between the Freeport Sulphur Company (a division of
FRP) and Felmont Oil Corporation dated June 19, 1990 (the "Processing Agreement")

10.12 Amendment Number 1 to the Processing Agreement

10.13 Amendment Number 2 to the Processing Agreement

10.14 1997 Stock Option Plan for Non-Employee Directors

10.15 Company Adjusted Stock Award Plan

10.16 Freeport Sulphur 1997 Stock Option Plan

10.17 Form of Stockholder Protection Rights Agreement between Freeport-McMoRan Sulphur Inc.
and Mellon Securities Trust Company, as Rights Agent

23.1 Consent of Arthur Andersen LLP
</TABLE>

E-1
<PAGE>

23.3 Consent of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, L.L.P. (included in
Exhibit 5.1)

23.4 Consent of Miller & Chevalier, Chartered (included in Exhibit 8.1)

23.5 Consent of Valuation Research Corporation (included in Exhibit 99.1)

24.1 Powers of Attorney

27.1 Financial Data Schedule

99.1 Solvency Opinion of Valuation Research Corporation
</TABLE>

- ------------------------

* Portions of this Exhibit have been omitted pursuant to a confidentiality
request filed with the Commission.

E-2

<PAGE>

CONTRIBUTION AND DISTRIBUTION AGREEMENT

CONTRIBUTION AND DISTRIBUTION AGREEMENT dated as of August 26, 1997 among
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a Delaware limited
partnership (together with its successors and permitted assigns, "FRP"),
FREEPORT-McMoRan INC., a Delaware corporation (together with its successors and
permitted assigns, "FTX") and FREEPORT SULPHUR COMPANY, a Delaware corporation
(together with its successors and permitted assigns, "COMPANY").

W I T N E S S E T H

WHEREAS, capitalized terms used in the Recitals shall have the meanings set
forth in Article I hereof, unless the context dictates otherwise;

WHEREAS, the Company is a wholly-owned subsidiary of FRP;

WHEREAS, FTX is the Administrative Managing General Partner and Special
General Partner of FRP, and FMRP Inc., a Delaware corporation and a wholly owned
subsidiary of FTX (together with its successors and permitted assigns, "FMRP"),
is the Managing General Partner and Special General Partner of FRP;

WHEREAS, FTX and FRP intend to contribute certain assets to the Company and
the Company intends to assume certain liabilities, subject to the terms and
conditions more particularly described herein (the "CONTRIBUTIONS");

WHEREAS, FRP intends to distribute (the "DISTRIBUTION") all of the
outstanding shares of Company Common Stock and Rights to the holders of FMRP
Units, Unit Equivalents and the Basic General Partnership Interest;

WHEREAS, the Board of Directors of FTX has approved an Agreement and Plan
of Merger between FTX and IMC Global Inc., a Delaware corporation ("IGL") dated
the date hereof (the "MERGER AGREEMENT") pursuant to which, and subject to the
terms and conditions thereof, FTX will merge with and into IGL (the "MERGER");

WHEREAS, in connection with the Merger and prior to the Contributions, IMC
Global Operations Inc, a Delaware corporation ("IMC OPERATIONS"), intends to
transfer and to confirm the prior transfer of certain assets to the Company and
the Company intends to assume certain liabilities, pursuant to an Assignment and
Assumption Agreement substantially in the form of EXHIBIT A hereto (the
"ASSIGNMENT AGREEMENT"); and

WHEREAS, the parties have determined that it is necessary and desirable to
set forth the principal transactions required to effect the Contributions and
the Distribution and to enter into other agreements that will govern certain
matters following the Distribution;

<PAGE>

NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained in this Agreement, the parties hereby agree as follows:

ARTICLE I
DEFINITIONS

Section 1.01. DEFINITIONS. As used herein, the following terms, when
capitalized, shall have the following meanings, unless the context dictates
otherwise:

"Action" means any claim, suit, chose in action, arbitration, mediation,
inquiry, proceeding or investigation by or before any court, governmental or
other regulatory or administrative agency or commission or any other tribunal.

"Affiliate" means with respect to any Person, any Person that directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the Person, whether
through ownership of voting securities, by contract, as trustee or executor or
otherwise; provided that (i) immediately following the Effective Time, the
Company shall not be an Affiliate of IGL or FRP and (ii) the Company shall not
be deemed to be an Affiliate of IMC-Agrico Company.

"Agreement" means this Contribution and Distribution Agreement, including
all exhibits and schedules hereto.

"Applicable Law" means all applicable provisions of all (i) constitutions,
treaties, statutes, laws (including the common law), rules, regulations,
ordinances, codes or orders of any Governmental Authority, (ii) Consents by
Governmental Authorities and (iii) orders, decisions, injunctions, judgments,
awards and decrees of or agreements rendered by or entered into with any
Governmental Authority.

"Assignment Agreement" shall have the meaning set forth in the Recitals.

"Assumed Liabilities" shall have the meaning set forth in Section 3.03
hereof.

"Balance Sheet" shall have the meaning set forth in Section 3.01(a) hereof.

"Basic General Partnership Interest" shall have the meaning set forth in
the Partnership Agreement.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the United States Securities and Exchange Commission.

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"Company Certificate" means the Certificate of Incorporation of the
Company.

"Company Bylaws" means the Bylaws of the Company as adopted by the
Company's Board of Directors.

"Company Common Stock" means shares of common stock, par value $.01 per
share, of the Company.

"Company Indemnitees" shall have the meaning set forth in Section 5.01(a)
hereof.

"Company Rights Plan" means the rights agreement of the Company as adopted
by the Company's Board of Directors.

"Consent" means any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration, or filing with, or report or notice to,
any Person, including but not limited to any Governmental Authority that is
required as a precondition to the transfer of one or more of the Transferred
Assets or the performance of one or more actions identified herein.

"Contaminant" means any waste, pollutant, hazardous or toxic substance or
waste, petroleum, petroleum-based substance or waste, special waste, or any
constituent of any such substance or waste.

"Contributions" shall have the meaning set forth in the Recitals.

"Database" means all geological, geophysical or other similar information
including but not limited to, files, surveys, maps, studies, contracts, logs,
computer programs, seismic cross sections, computer tapes and other technical
data owned or licensed by or leased to FTX and/or FRP which are in existence on
the date hereof and which are used primarily in connection with, or which are
otherwise necessary or desirable to operate, the Transferred Businesses.

"Distribution" shall have the meaning set forth in the Recitals.

"Distribution Agent" means Chase Mellon Shareholder Services, L.L.C., as
agent of the holders of FMRP Units, Unit Equivalents and the Basic General
Partnership Interest.

"Distribution Date" means the date on which the Distribution is effected.

"Effective Time" shall mean the effective time of the Merger, as provided
in Section 1.2 of the Merger Agreement.

"Employee Benefits Agreement" means the agreement among FTX, FRP and
Company, in substantially the form of EXHIBIT B hereto.

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"Environmental Law" means all Applicable Law relating to or addressing the
environment, health or safety, including but not limited to OSHA and RCRA and
any state equivalent thereof or any successor statute.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Excluded Assets" shall have the meaning set forth in Section 3.02 hereof.

"Excluded Liabilities" shall have the meaning set forth in Section 3.04
hereof.

"Fertilizer Business" means the business conducted by IMC-Agrico Company.

"FM Services Agreement" means the Termination Agreement between FTX, FCX
and FM Services Company, a Delaware corporation, substantially in the form of
EXHIBIT C hereto, as such agreement may be amended from time to time.

"FMRP" shall have the meaning set forth in the Recitals.

"FMRP Unit" shall have the meaning set forth in the Partnership Agreement.

"Form 10" means the registration statement on Form 10 with respect to the
shares of Company Common Stock and Rights, to be filed with the Commission under
the Exchange Act, together with any amendments thereto.

"FRP Indemnitees" shall have the meaning set forth in Section 5.01(b).

"Governmental Authority" means any federal, state, county, municipal or
other government, department, commission, board, court, agency, authority, or
any other instrumentality of any of them, or any other organization exercising
legislative, executive or judicial authority over any of the foregoing.

"Hydrocarbons" means crude oil and/or condensate, natural gas, distillate,
natural gas liquids and all products recovered in the processing of natural gas
liquids, including, without limitation natural gasoline, iso-butane, normal
butane, propane and ethane (including such methane allowable in commercial
ethane).

"IGL" shall have the meaning set forth in the Recitals.

"IMC Operations" shall have the meaning set forth in the Recitals.

"Income Statement" shall have the meaning set forth in Section 3.01(a)
hereof.

"Indemnified Party" shall have the meaning set forth in Section 5.01(d)
hereof.

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"Indemnifying Party" shall have the meaning set forth in Section 5.01(d)
hereof.

"Indemnitee" shall mean any Company Indemnitee or any FRP Indemnitee, as
the case may be.

"Information Statement" means the information statement filed as part of
the Form 10 to be sent to the holders of FMRP Units, Unit Equivalents and the
Basic General Partnership Interest, in connection with the Distribution.

"Insurance Proceeds" means any monies (i) received by an insured from an
insurance carrier or (ii) paid by an insurance carrier on behalf of the insured,
in either case net of any applicable premium adjustments (including reserves),
retrospectively-rated premium adjustments, deductibles, retentions, or costs
paid by such insured.

"Intellectual Property" means any and all United States and foreign (a)
patents (including design patents, industrial designs and utility models) and
patent applications (including docketed patent disclosures awaiting filing,
reissues, divisions, continuations-in-part and extensions), patent disclosures
awaiting filing determination, inventions, and improvements thereto, (b)
trademarks, service marks, trade names, trade dress, logos, business and product
names, slogans, and registrations and applications for registration thereof,
together with the goodwill of the businesses attributable thereto, (c)
copyrights (including software) and registrations thereof, (d) inventions,
processes, designs, formulae, trade secrets, know-how, industrial models,
confidential and technical information, manufacturing, engineering and technical
drawings, product specifications and confidential business information, (e)
intellectual property rights similar to the foregoing, and (f) copies and
tangible embodiments thereof (in whatever form or medium, including electronic
media).

"Leased Real Property" means all interests (including offshore acreage)
leased pursuant to the Leases, together with all structures, facilities,
improvements, fixtures, systems, equipment, and items of real property owned or
leased by FRP or FTX that presently (or on the Distribution Date) are or will be
located on the real property or other acreage subject to the Leases, and all of
FRP's or FTX's right, title and interest in and to all easements, servitudes,
licenses, rights, rights-of-way, operating rights, franchises and appurtenances
relating to the foregoing.

"Leases" means the real property leases, subleases, licenses and occupancy
agreements set forth on Part 1 of Schedule 3.01 hereto pursuant to which FRP or
FTX is the lessee, sublessee, licensee, or occupant.

"Liabilities" means any and all claims, debts, costs, indebtedness,
liabilities and obligations, absolute or contingent, matured or not matured,
liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever
arising, including all costs and expenses related thereto and including, without
limitation, those claims, debts, costs, indebtedness, liabilities and
obligations arising under any law, rule, regulation, Action, threatened Action,
order or consent decree of any governmental

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entity or any award of any arbitrator of any kind, and those arising under
any contract, commitments or undertaking.

"Lien" means any interest in property held by someone other than the owner
of the property, including a mortgage, pledge, hypothecation, claim, security
interest, pledge, encumbrance, lease, sublease, license, occupancy agreement,
adverse claim or interest, conditional sale, easement, servitude, covenant,
encroachment, burden, title defect, title retention agreement, voting trust
agreement, option, lien, right of first refusal, right of rescission, charge or
other restriction or limitation of any nature whatsoever.

"Losses" shall have the meaning set forth in Section 5.01(a) hereof.

"Merger" shall have the meaning set forth in the Recitals.

"Merger Agreement" shall have the meaning set forth in the Recitals.

"NYSE" means the New York Stock Exchange.

"Owned Real Property" means the real property identified on Part 1 of
Schedule 3.01 that is owned by FRP or FTX in fee simple, together with all other
structures, facilities, improvements, fixtures, systems, equipment, and items of
real property that presently (or on the Distribution Date) are or will be
located thereon or attached or appurtenant thereto and all easements,
servitudes, licenses, rights, rights-of-way, operating rights, franchises and
appurtenances relating to the foregoing.

"Partnership Agreement" means the Amended and Restated Agreement of Limited
Partnership of Freeport-McMoRan Resource Partners, Limited Partnership, dated
May 29, 1987 (amending and restating the Agreement of Limited Partnership
entered into as of April 17, 1986), as amended by amendments dated December 16,
1988, March 29, 1990, April 6, 1990, January 27, 1992 and October 14, 1992.

"Permit" means any foreign, federal, state, municipal and local permit,
license, registration, consent, order, administrative consent order,
certificate, approval or other authorization with respect to FRP or FTX
necessary for the ownership or use of any Transferred Asset or the conduct of
the Transferred Businesses as it is currently conducted or has been previously
conducted.

"Person" means any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, Governmental
Authority or other entity.

"Prior Business" shall have the meaning set forth in Section 3.03(c)
hereof.

"Prior Business Real Property" shall have the meaning set forth in Section
3.03(e) hereof.

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"Real Property" shall mean the Owned Real Property and the Leased Real
Property.

"Record Date" means the date determined by FTX, in its capacity as the
Administrative Managing General Partner of FRP, as the record date for
determining the holders of FMRP Units, Unit Equivalents, and the Basic General
Partnership Interest who are entitled to receive the Distribution.

"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant
into the indoor or outdoor environment or into or out of any Real Property,
including the movement of Contaminants through or in the air, soil, surface
water, groundwater or Real Property.

"Remedial Action " means actions required to (i) clean up, remove, treat
or in any other way address Contaminants in the indoor or outdoor environment;
(ii) prevent the Release or threatened Release or minimize the further Release
of Contaminants or (iii) investigate and determine if a remedial response is
needed and to design such a response and post-remedial investigation,
monitoring, operation and maintenance and care, in each case, to the extent
required by an Environmental Law.

"Rights" means the preferred stock purchase rights to be issued by the
Company pursuant to the Company Rights Plan.

"Securities Act" means the Securities Act of 1933, as amended.

"Stock Incentive Plan" means the stock incentive plan or plans as adopted
by the Company.

"Tax" means any federal, state, provincial, local, foreign or other income,
alternative minimum, accumulated earnings, personal holding company, franchise,
capital stock, net worth, capital, profits, windfall profits, gross receipts,
value added, sales, use, goods and services, excise, customs duties, transfer,
conveyance, mortgage, registration, stamp, documentary, recording, premium,
severance, environmental (including taxes under Section 59(A) of the Code), real
property, personal property, ad valorem, intangible, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers' compensation, payroll, healthcare, withholding, estimated or similar
tax, duty or other governmental charge or assessment or deficiencies thereof,
including all interest and penalties thereon and additions thereto whether
disputed or not.

"Tax Cooperation Agreement" means the agreement among FTX, FRP and the
Company, in substantially the form of EXHIBIT D hereto.

"Transferred Assets" means the assets identified in Section 3.01(a) hereof,
to the extent that such assets do not constitute Excluded Assets.

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<PAGE>

"Transferred Businesses" means, collectively: (i) the businesses and
operations of FRP, FTX and their respective Affiliates to the extent relating to
the exploration, production, development, processing, transportation, storage,
terminalling, sale, purchase or marketing of sulphur, in whatever form, and of
sulphuric acid, or the provision of other services in connection therewith,
including, without limitation, the operations conducted from the Real Property,
but expressly excluding the purchase and processing of sulphur by IMC-Agrico
Company; (ii) the businesses and operations of FRP, FTX and their respective
Affiliates to the extent relating to the exploration, production, development,
processing, transportation, sale, purchase or marketing of Hydrocarbons
produced from or allocable to the Real Property, or the provision of other
services in connection therewith; (iii) the businesses and operations of the
entities identified on Part 2 of Schedule 3.01 as being transferred to the
Company as part of the Transferred Assets; (iv) to the extent not already
included in the descriptions set forth in (i) through (iii) of this definition,
(A) all businesses and operations reflected on the Balance Sheet and Income
Statement; and (B) all businesses and operations located on the Real Property or
using or consuming any of the Transferred Assets.

"Unit Equivalent" shall have the meaning set forth in the Partnership
Agreement.

ARTICLE II
THE DISTRIBUTION

Section 2.01. COOPERATION PRIOR TO THE DISTRIBUTION. (a) As soon as
practicable after the execution of this Agreement, FRP and the Company shall
prepare and file with the Commission, the Form 10, which shall include the
Information Statement, setting forth appropriate disclosure concerning the
Company, the Distribution and any other appropriate matters required to be
stated therein. FRP shall use best reasonable efforts to cause the Form 10 to
become effective under the Exchange Act, and thereafter FRP shall mail the
Information Statement to holders of FMRP Units, Unit Equivalents and the Basic
General Partnership Interest as of the Record Date.

(b) FRP and the Company shall take all such action as may be
reasonably necessary or appropriate under the securities or blue sky laws of
states or other Governmental Authorities of the United States in connection with
the transactions contemplated by this Agreement.

(c) The Company shall prepare, file (not later than the date of
filing of the Form 10 with the Commission) and pursue an application to list the
Company Common Stock and associated Rights on the NYSE.

Section 2.02. FTX BOARD ACTION; CONDITIONS PRECEDENT TO THE DISTRIBUTION.
The Board of Directors of FTX shall, in its discretion, acting in its capacity
as the Administrative Managing General Partner of FRP, (a) establish the Record
Date and Distribution Date, and (b) establish any appropriate procedures in
connection with the Distribution. In no event shall the Distribution Date be
later than the Effective Time. In addition, in no event shall the Distribution
occur unless each of the following conditions shall have been satisfied or
waived by FRP and FTX:

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<PAGE>

(i) The Company shall have been duly formed and shall be validly
existing; the Company's Board of Directors shall have been elected by FRP; the
Company Certificate and Company Bylaws shall be in effect; and the Company's
Board of Directors shall have adopted the Company Rights Plan and declared and
paid a dividend of 1 Right for each share of Company Common Stock outstanding;

(ii) the Form 10 shall have become effective under the Exchange Act;

(iii) the Company Common Stock and Rights associated therewith
shall have been approved for listing on the NYSE, subject to official notice of
issuance;

(iv) IMC Operations and FRP shall have executed the Assignment
Agreement;

(v) the Transferred Assets shall have been transferred to the
Company, and the Assumed Liabilities shall have been assumed by the Company, in
each case as contemplated by Article III hereof;

(vi) the FM Services Agreement, the Tax Cooperation Agreement and the
Employee Benefits Agreement shall have been duly and validly authorized,
executed and delivered by the respective parties thereto;

(vii) all conditions precedent to the Merger shall have occurred
or been waived by the party enjoying the benefit thereof;

(viii) the Company's Board of Directors shall have adopted, and FRP
as the sole shareholder of the Company shall have approved, the Stock Incentive
Plan and shall take all such actions as are necessary or desirable to cause all
outstanding options to purchase FTX Common Stock and any awards related to FTX
Common Stock to be converted into an adjusted option to purchase or award
relating to FTX Common Stock and a new option to purchase or award relating to
the Company Common Stock issued in accordance with the Stock Incentive Plan; and

(ix) to the extent required by contract or Applicable Law in
connection with the conveyance of the Transferred Assets, FRP shall have
obtained the Consents identified on Schedule 2.02 hereto.

Each of the parties hereto agrees to use its best reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other party in doing, all things necessary, proper
or advisable to satisfy and fulfill the foregoing conditions as soon as
reasonably practicable and to cause the Distribution to be effective.

Section 2.03. THE DISTRIBUTION. (a) On the Distribution Date, subject to
the conditions set forth in this Agreement, FRP shall, except as otherwise
provided in Section 2.04, cause the Distribution Agent to distribute to each
holder of FMRP Units, Unit Equivalents and the Basic

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<PAGE>

General Partnership Interest on the Record Date (i) 1 share of Company Common
Stock and the associated Right for each 10 FMRP Units, (ii) 1 share of
Company Common Stock and the associated Right for each 10 Unit Equivalents,
and (iii) 1 share of Company Common Stock and the associated Right for each
10 units of Basic General Partnership Interest, so held.

(b) The Company shall provide all certificates for shares of Company
Common Stock that FRP shall require in order to effect the Distribution.

Section 2.04. SALE OF FRACTIONAL SHARES. Prior to the Distribution Date,
FRP shall appoint the Distribution Agent as agent for all holders on the Record
Date of FMRP Units, Unit Equivalents and the Basic General Partnership Interest
who would receive in the Distribution any fractional share of Company Common
Stock. The Distribution Agent shall aggregate all such fractional shares and
sell them in an orderly manner after the Distribution Date in the open market
and, after completion of such sales, distribute a prorated portion of the
proceeds from such sales, based upon the average gross selling price of all such
fractional shares, to each holder of FMRP Units, Unit Equivalents or Basic
General Partnership Interest who would otherwise have received a fractional
share. FTX shall reimburse the Distribution Agent for the costs and expenses
incurred in connection with the foregoing.

ARTICLE III
CONVEYANCE AND ASSUMPTION

Section 3.01. TRANSFER OF ASSETS.

(a) Upon the terms and subject to the conditions of this Agreement,
FRP and FTX shall take all such action as may be necessary or appropriate under
Applicable Law to assign, transfer and deliver, or cause to be assigned,
transferred and delivered, to the Company, on or prior to the Distribution Date,
but effective as of the Distribution Date, all right, title and interest of FRP,
FTX, or any of their respective Affiliates in and to all of the following
assets, to the extent that such assets exist on the Distribution Date and do not
constitute Excluded Assets, and except as set forth in Section 3.01(b) below
(collectively, but expressly excluding any Excluded Assets, the "TRANSFERRED
ASSETS"):

(i) All assets owned by FTX, FRP or any of their Affiliates that are
used primarily in connection with the Transferred Businesses, including all
(A) assets reflected on the June 30, 1997, unaudited consolidated balance
sheet of the Transferred Businesses attached as EXHIBIT E hereto (the
"BALANCE SHEET"), as well as those acquired or generated by the Transferred
Businesses or any Transferred Asset since the date of the Balance Sheet,
and (B) those assets that generate any income reflected on the unaudited
income statement of the Transferred Businesses for calender year 1996 and
for the six month period ended June 30, 1997 attached as EXHIBIT F (the
"INCOME STATEMENT") hereto less, in the case of (A) or (B), any assets
disposed of since the date of the respective statements; PROVIDED THAT the
parties

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<PAGE>

hereto acknowledge that the actual values attributed to the assets included
in the Balance Sheet and Income Statement may change prior to the Effective
Time.

(ii) All right, title and interest of FRP, FTX or any of their
Affiliates in and to any and all of the assets listed on Schedule 3.01
hereto;

(iii) All right, title and interest of FRP, FTX or any of their
Affiliates in and to any and all of the assets physically located on any of
the Real Property;

(iv) All books, records and information of FTX, FRP and their
Affiliates recorded on any form of media whether owned, leased or licensed
by FTX, FRP or an Affiliate thereof, including magnetic disk, computer
drives or microfiche, to the extent the same primarily relate to or are
used primarily by or primarily in connection with the Transferred
Businesses or any Transferred Asset; all advertising materials, catalogs,
price lists, correspondence, mailing lists, lists of customers,
distribution lists, photographs, production data, sales and promotional
materials and records, purchasing materials and records, personnel records,
manufacturing and quality control records and procedures, blueprints,
specifications, drawings, schematics, research and development files,
records, data and laboratory books, Intellectual Property filings or
registrations, media materials and plates, accounting records, sales order
files, litigation files, logs, seismic and geophysical information,
geological and chemical data and information, reserve studies and
evaluations, fluid samples, well cores, title abstracts and opinions,
production data and reports, well testing data and reports, and maps, to
the extent that same primarily relate to or are used primarily by or
primarily in connection with the Transferred Businesses or any Transferred
Asset.

(v) Cash in amount of $2,000,000;

(vi) All credits, prepaid expenses, deferred charges, advance
payments, security deposits and prepaid items owned by, accrued in favor of
or held by FRP, FTX or any Affiliate thereof to the extent relating
primarily to the Transferred Businesses or any Transferred Asset.

(vii) All notes, accounts receivable, rights to payment or other
evidence of indebtedness generated by FRP and/or FTX primarily in
connection with the Transferred Businesses or any Transferred Asset; all
cash and cash equivalents paid in respect of any such notes, accounts
receivable, rights to payment or other indebtedness; and all Liens, letters
of credit, guarantees or bonds to secure the payment of all such amounts.

(viii) All of the right, title and interest of FRP, FTX or any of
their Affiliates in and to all contracts and agreements between FRP, FTX
and/or any of their Affiliates, on the one hand and any third party to the
extent made by or for the primary benefit of the Transferred Businesses or
any Transferred Asset.

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<PAGE>

(ix) All asserted and unasserted Actions now owned by FRP and/or FTX
that are related primarily to or arise primarily out of the Transferred
Businesses or any of the Transferred Assets, including any claim for
royalty refunds or rebates from any land owner, including the United
States, and any claim for balancing of Hydrocarbons.

(x) All Consents and Permits held by FRP, FTX or any of their
Affiliates for the primary benefit of the Transferred Businesses or any
Transferred Asset.

(xi) All machinery, equipment, furniture, furnishings, automobiles,
trucks, vehicles, vessels, boats, aircraft, tools, dies, molds, wells,
casing, tubing, pumping units, engines, platforms, derricks, separators,
compressors, flow lines, tanks, pipelines, chemicals, power generation and
transmission equipment, communication systems, meters, motors, parts and
similar property (including, but not limited to, any of the foregoing
purchased subject to any conditional sales or title retention agreement in
favor of any other Person or subject to any financed lease in favor of any
other Person) to the extent used primarily in connection with the
Transferred Businesses or any Transferred Asset.

(xii) All servitudes, easements, rights of way, water rights, grazing
leases, operating rights, exploration rights, sharing agreements, balancing
agreements, pooling or unitization agreements, farmout or farmin
agreements, unit designation and pooling orders or other rights or
agreements which bear primarily upon or are for the primary benefit of the
Transferred Businesses or any Transferred Asset.

(xiii) All sulphur, Hydrocarbons or other minerals to the extent
produced from or are allocable to the interest of FTX, FRP or any of their
Affiliates in and to any of the Leased Real Property.

(xiv) All Intellectual Property owned or licensed by FRP, FTX or any
of their Affiliates and all rights thereunder or in respect thereof to the
extent relating primarily to or used primarily or held primarily for use in
connection with the Transferred Businesses or any Transferred Asset,
including, but not limited to, rights to sue for and remedies against past,
present and future infringements thereof, and rights of protection of
interests therein under the laws of any jurisdiction worldwide;

(xv) All Owned Real Property and Leases and all licenses, permits,
approvals and qualifications relating to any Real Property issued to FRP,
FTX or any of their Affiliates by any Governmental Authority;

(xvi) To the extent not otherwise described above, the Database, to
the extent permitted by contractual arrangements and agreements relating to
the Database and applicable law;

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<PAGE>

(xvii) To the extent not otherwise described above, the assets
acquired, or intended to be acquired, by FRP from Pennzoil Company or its
Affiliates pursuant to the Asset Purchase Agreement dated as of October 22,
1994;

(xviii) To the extent not otherwise described above, the assets
acquired or intended to be acquired by FRP pursuant to the Assignment
Agreement, or, at FRP's discretion, the right to acquire such assets;

(xix) Any amounts reserved by FTX prior to the Distribution Date
in any self-insured accrual accounts to the extent relating to the self-
insured portion or deductible of any Assumed Liabilities; and

(xx) Any payments made to or on behalf of FTX or any Actions in
favor of FTX under any insurance policies retained by FTX to the extent
that the same relate to any Assumed Liabilities; provided that the past and
present insurance policies themselves shall be Excluded Assets.

(xxi) Any goodwill associated with the Transferred Businesses or
Transferred Assets.

(xxii) Any assets intended to be transferred to the Company
pursuant to the Employee Benefits Agreement.

The parties acknowledge and agree that the right, title and interest of FRP, FTX
and their Affiliates in and to the Excluded Assets are to be retained by FRP,
FTX or such Affiliate, as the case may be, and are not being transferred to the
Company pursuant to this Agreement or otherwise.

(b) In the event that FTX or FRP, or any other relevant Person,
shall be unable to transfer any of the Transferred Assets to the Company prior
to the Distribution Date due to the failure of FTX, FRP or any other Person to
obtain any necessary Consents, FTX, FRP or such other Person, as appropriate:
(i) shall continue to seek the necessary Consents, in accordance with Section
3.05(b) hereof; (ii) shall hold such Transferred Assets for the benefit of the
Company and cooperate with the Company in any lawful and economically feasible
arrangement to insure that the Company shall receive the benefits thereof, (iii)
shall hold or cause to be held for the account of the Company all accounts
receivable or accounts payable related to the Company's interest in any such
Transferred Assets accrued as, and accruing after, the Distribution Date, (iv)
shall make available to the Company all information relating to such Transferred
Assets to the extent making such information available is permitted by
Applicable Law and the contractual arrangements relating to such Transferred
Assets, (v) shall not, and shall cause all Affiliates not to, assign, transfer,
otherwise dispose of or grant a Lien upon any such Transferred Assets to any
Person other than the Company, and (vi) shall upon obtaining the necessary
Consents relating to such Transferred Assets, promptly take such action, and
cause all other relevant Persons to promptly take, such action as may be
necessary to complete the transfer to the Company of such Transferred Assets,
including without

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limitation, all accrued accounts payable and accrued accounts receivable
related to such Transferred Assets. Any transfer of a Transferred Asset
after the Distribution Date shall be effective as of the Distribution Date.
It is agreed and understood that no party shall be liable in any manner to
any other party for any failure of any of the transfers contemplated by this
Article III to be consummated prior to the Distribution Date. Nothing in
this Article III shall be deemed to require the transfer of any Transferred
Assets which by their terms or operation of law cannot be transferred.

Section 3.02 EXCLUDED ASSETS. (a) Notwithstanding anything contained in
this Agreement or in any conveyance document to the contrary, the following
assets (collectively, the "EXCLUDED ASSETS") are not Transferred Assets and
shall not be transferred to Company hereunder:

(a) Any and all present and past insurance policies under the
FTX and FM Services Insurance Program, provided however, that any payments
to or on behalf of FTX under such policies to the extent that the same
relate to any Assumed Liabilities shall be a Transferred Asset;

(b) Any direct or indirect interest of FRP, FTX or any Affiliate
in or to (i) IMC-Agrico Company, (ii) FMRP, (iii) Agrico, Limited
Partnership or (iv) IMC-Agrico MP, Inc.; and

(c) Any assets used or consumed primarily in connection with or
otherwise primarily related to the Fertilizer Business other than sulphur.

Section 3.03. ASSUMPTION OF ASSUMED LIABILITIES. Subject to the terms and
conditions set forth in this Agreement, the Company shall assume and agree to
pay, honor and discharge when due, and take all action necessary or appropriate
under Applicable Law to assume, effective on or prior to the Distribution Date,
all Liabilities arising primarily from or primarily in connection with the
ownership, acquisition, conduct or operation (past, present or future) of the
Transferred Businesses (or any businesses, assets or operations managed or
operated by FTX or FRP or any past or present Affiliate thereof that have been
sold, liquidated, merged or otherwise disposed of or discontinued prior to the
Distribution Date to the extent that such businesses, assets or operations would
have been part of the "Transferred Businesses" had they been owned by FTX or FRP
on the Distribution Date (such businesses, assets or operations being herein
referred to as the "Prior Businesses")) or any Transferred Assets or relating
primarily to the ownership or use of the Transferred Assets, whether arising
before, on or after the Distribution Date and whether related to the current,
past or future operations of the Transferred Businesses, other than Excluded
Liabilities (collectively, the "ASSUMED LIABILITIES"). Without limitation of the
foregoing, Assumed Liabilities include, to the extent that they do not include
any Excluded Liabilities:

(a) Any and all Liabilities reflected on the Balance Sheet or
incurred after the date of the Balance Sheet in connection with the
Transferred Businesses or any Transferred Asset other than Excluded
Liabilities;

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(b) Liabilities in respect of present or former FTX or FRP
employees, to the extent specifically assumed by the Company pursuant to
the Employee Benefits Agreement;

(c) Any and all Liabilities primarily arising out of the
contracts and agreements described in Section 3.01(a)(viii) above;

(d) All Liabilities primarily related to, primarily associated
with or arising out of (i) the occupancy, operation, use or control of any
of the Real Property or any other real property occupied, operated, used or
controlled by the Prior Businesses (the "Prior Business Real Property"),
(ii) the operations of the Transferred Businesses or the Prior Businesses
(or in each case, any predecessor thereto, but in every such case, only
with respect to that portion of such predecessors' businesses that now
constitute the Transferred Businesses or previously constituted the Prior
Businesses), in each case incurred under or imposed by any Environmental
Law (including without limitation any Release or threatened Release of any
Contaminant on, in, at, to, beneath or from the Real Property or any Prior
Business Real Property, including, without limitation, all facilities,
improvements, structures and equipment thereon, surface water thereon or
adjacent thereto and soil or groundwater thereunder or any conditions
whatsoever on, in, at, under or in the vicinity of such real property),
(iii) the generation, handling transportation, storage, discharge or
disposal of any Contaminant primarily in connection with the Transferred
Businesses or the Prior Businesses, (iv) any Remedial Action required under
any Environmental Law primarily in connection with the Transferred
Businesses or the Prior Businesses; or (v) any violation of any
Environmental Law primarily in connection with the operations of the
Transferred Businesses or the Prior Businesses; and

(e) Any Liabilities arising out of or related to litigation to
the extent related to the current, past or future operations of the
Transferred Businesses.

Section 3.04 EXCLUDED LIABILITIES. Notwithstanding any provision of this
Agreement or any conveyance or assumption agreement to the contrary, the Company
shall not assume any of the following Liabilities (collectively, the "EXCLUDED
LIABILITIES"):

(a) Any Liabilities, obligations or commitments of FRP, FTX or
any other Person relating primarily to or arising primarily out of the
Fertilizer Business or any business other than the Transferred Businesses
or the Prior Businesses;

(b) Any and all Taxes relating to or arising out of the business
operations or activities of FRP, FTX or any of their Affiliates accruing,
or with respect to any event or time period occurring, at or prior to the
Distribution Date;

(c) Any and all Liabilities relating to, arising out of or in
connection with, any businesses, assets or operations managed or operated
by FTX or FRP have been sold,

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<PAGE>

liquidated, merged or otherwise disposed of or discontinued prior to the
Distribution Date, other than the Transferred Businesses or Prior
Businesses;

(d) Any and all Liabilities relating to the Excluded Assets;

(e) Any and all Liabilities for money borrowed by FTX, FRP or
any of their Affiliates;

(f) Any and all Liabilities for which the Company is relieved of
liability under the Employee Benefits Agreement;

(g) All Liabilities related to, associated with or arising out
of (i) the occupancy, operation, use or control of any Real Property other
than the Real Property or the Prior Business Real Property, (ii) the
operations of the businesses and operations of FTX or FRP or any of their
Affiliates other than the Transferred Businesses or the Prior Businesses
(or in each case, any predecessor thereto), in each case incurred under or
imposed by any Environmental Law (including without limitation any Release
or threatened Release of any Contaminant on, in, at, to, beneath or from
any real estate other than the Real Property or the Prior Business Real
Property, including, without limitation, all facilities, improvements,
structures and equipment thereon, surface water thereon or adjacent thereto
and soil or groundwater thereunder or any conditions whatsoever on, in, at,
under or in the vicinity of such real property), (iii) the generation,
handling transportation, storage, discharge or disposal of any Contaminant
relating to any business or operation of FTX, FRP or any of their
Affiliates other than the Transferred Businesses or the Prior Businesses;
(iv) any Remedial Action required under any Environmental Law relating to
any business or operation of FTX, FRP or any of their Affiliates other than
the Transferred Businesses or the Prior Businesses; or (v) any violation of
any Environmental Law in connection with the operations of the business or
operations of FTX, FRP or and of their Affiliates other than the
Transferred Businesses or the Prior Businesses; or

(h) Any Liabilities arising out of or related to litigation to
the extent related to the current, past or future operations of the
business or operations of FTX, FRP or any of their Affiliates other than
the Transferred Businesses or the Prior Businesses.

(i) Any amounts for which checks or other drafts have been
drawn, in the ordinary course of business but which have not yet been paid
by the financial institution upon which they are drawn, to the extent that
such amounts constitute Liabilities.

Section 3.05. FURTHER ASSURANCES AND CONSENTS. (a) The transfer of the
Transferred Assets and the assumption of the Assumed Liabilities contemplated
herein shall be further evidenced by the execution and delivery by FRP, FTX, the
Company and any other relevant Person of such acts of transfer, conveyance and
assumption as may be reasonably requested by any party. Each of the parties
hereto will execute and deliver, and cause all other relevant Persons to execute
and deliver,

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such further instruments of conveyance, assumption and assignment and will
take such other actions (including, without limitation, (i) any changes or
amendments to or redelivery of such instruments of conveyance, assumption and
assignment that may be necessary to vest in the Company title to or other
applicable rights in the Transferred Assets and (ii) the delivery of
originals of stock certificates, motor vehicle titles and other similar
documents of title) as any other party may reasonably request in order to
effectuate the purposes of this Agreement.

(b) Each of the parties hereto shall use its reasonable efforts
to take all actions necessary to consummate the transactions contemplated by
this Agreement, including obtaining any Consents before or after the
Distribution Date, until such time as such Consent has been obtained. Any and
all out-of-pocket expenses and costs of seeking to obtain or of obtaining any
such Consent whether before or after the Distribution Date shall be borne by FTX
(subject to the terms of Section 8.11 hereof).

Section 3.06. "AS-IS, WHERE-IS." Each of the parties hereto understands
and agrees that no party hereto is, in this Agreement or in any other agreement
or document contemplated by this Agreement or otherwise, representing or
warranting in any way (a) as to the value or freedom from encumbrance of, or any
other matter concerning, any of the Transferred Assets or (b) as to the legal
sufficiency to convey title to any Transferred Asset, it being understood that
except as otherwise set forth in this Agreement or in any ancillary transfer
document, the Transferred Assets are being conveyed "As-is, Where-is," except
for rights or actions in warranty against predecessors in title (other than FRP,
FTX or any prior or current Affiliates thereof). It is understood and agreed
that except for the obligations of FTX, FRP and other Affiliates under Section
3.01(b) and 3.05(b), the Company shall bear the economic and legal risk that any
conveyance of the Transferred Assets shall prove to be insufficient or that the
Company's title to any such assets shall be other than good and marketable and
free from encumbrances. Similarly, each party hereto understands and agrees
that no party hereto is, in this Agreement or in any other agreement or document
contemplated by this Agreement or otherwise, representing or warranting in any
way that the obtaining of any Consents or approvals or the making of any filings
or applications contemplated by this Agreement will satisfy the provisions of
any or all applicable agreements or the requirements of any or all applicable
laws or judgments, it being agreed and understood that except for the obligation
of FTX, FRP and their Affiliates under Section 3.01(b) and 3.05(b) the Company
shall bear the economic and legal risk that any necessary consents or approvals
are not obtained or that any requirements of law or judgments are not complied
with.

Section 3.07. USE OF NAME "FREEPORT SULPHUR COMPANY". FTX and FRP consent
to the use by the Company of the name "Freeport Sulphur Company".

Section 3.08. RIGHT TO AUDIT. FTX and its successor shall have the right
to audit all amounts in respect of Section 3.01(a)(vi) and (vii) to insure that
such amounts are properly allocable to the Transferred Businesses or Transferred
Assets by the giving of written notice to the Company within 30 days of the
Distribution Date.

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Section 3.09. ADMINISTRATION OF INSURANCE POLICIES. FTX, FRP and the
Company agree to cooperate with each other with respect to the processing of any
claims that are covered by any insurance policy in existence prior to the
Distribution Date. The parties agree to execute an agreement pursuant to which
FM Services will administer insurance claims on behalf of FTX, FRP, the Company,
certain other Persons that are also beneficiaries of insurance policies covering
periods prior to the Effective Time and their respective Affiliates. Among
other things, this agreement will provide that (a) FTX and FM Services will
continue to own those insurance policies that each of FTX and FM Services owns
at the Effective Time; (b) FM Services will administer all claims made (whether
before or after the Effective Time) under any policies owned by FTX and FM
Services at the Effective Time subject to the payment by all such beneficiaries
of the reasonable costs of FM Services to handle such matters with such
administration activities being subject to the direction of the respective
beneficiaries and their respective successors and/or assigns in accordance with
criteria typical to and customary with third party administration relationships
common in the industry; (c) FTX will transfer to FM Services or the appropriate
Person any accruals for the self-insured portion or deductible relating to any
claims or threatened claims against such Person other than FTX or FRP covered by
one or more insurance policies owned by FTX, as funds are required to meet those
obligations; and (d) the FM Services insurance policies under which FTX is a
beneficiary shall be supplemented with the following endorsement or an
endorsement that is otherwise reasonably acceptable to IMC Global Inc. and the
parties hereto: "In consideration of premiums paid, it is understood and agreed
that IMC Global Inc. is an Additional Named Insured under this policy as their
interests may appear with respect to all operations of FTX which have been
acquired by IMC Global Inc. as of (date of merger)" for all losses covered by
the policy and occurring prior to the Effective Time of the merger.

Section 3.10. OTHER ACTIONS OF THE COMPANY. In addition to the specific
actions required to be taken by virtue of this Agreement, the Company agrees to
take all such lawful action with respect to the Company Common Stock as may be
necessary or appropriate in order to comply with legal requirements applicable
to the Distribution, the Merger or any of the other transactions contemplated by
this Agreement.

Section 3.11. POST-CLOSING OBLIGATIONS.

(a) In the event that any party to this Agreement (the "Paying
Party") makes any payment in respect of any obligation for which any other
Person (the "Obligated Party") is obligated pursuant to this Agreement or
otherwise, the Obligated Party shall reimburse the Paying Party within 30 days
of receiving a written request from the Paying Party containing reasonable
evidence that the Paying Party has made such payment. To the extent that any
pay period for any Transferred Employees (as such term is defined in the
Employee Benefits Agreement) spans a period of time which includes days both
before and after the Effective Time, the obligation of FTX and the Company for
such amounts shall be prorated, with FTX being obligated to pay an amount equal
to the total employee pay check for such pay period (including all withholdings)
times a fraction the numerator of which is the number of days in the pay period
prior to the date of the Effective Time and the denominator of which is the
total number of days in the pay period, and the Company being

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obligated to pay an amount equal to the total pay check for such pay period
(including all withholdings) times a fraction the numerator of which is the
number of days during the pay period on or after the Effective Time and the
denominator of which is the total number of days in the pay period. The
Company shall make the payment to the Transferred Employees for such pay
period and FTX shall reimburse the Company for its pro rata portion thereof
in accordance with the procedures set forth in the immediately preceding
sentence.

ARTICLE IV
EMPLOYEES, EMPLOYEE BENEFIT PLANS AND TAXES

Section 4.01. TERMINATION OF EMPLOYMENT; EMPLOYEES BENEFITS AGREEMENT.
FTX, FRP and Company agree to execute and be bound by the Employee Benefits
Agreement. Immediately prior to the Effective Time, FTX and FRP shall terminate
any of their remaining employees who are actively at work at the Effective Time
that have not been transferred to the Company or have not previously left the
employ of FTX. FTX and FRP acknowledge that the Company intends to offer
employment to many of the employees currently employed by FTX and FRP.

Section 4.02. WORK RELATED CLAIMS. From and after the Distribution Date,
FTX and FRP shall remain solely responsible for any and all Liabilities to or in
respect of any employee, excluding any Transferred Employee (as defined in the
Employee Benefits Agreement), relating to or arising in connection with any and
all claims under applicable workmen's compensation laws, the Jones Act, 46
U.S.C. Section 688, the Longshore and Harbor Workers' Compensation Act, 33
U.S.C. Section 901, ET SEQ. or under similar laws, or arising in connection with
any occupational injury or disease, in each case occurring or existing on or
prior to the Distribution Date. FTX and FRP will comply with and shall be
responsible for all Liabilities incurred in connection with noncompliance with
the Worker Adjustment and Retraining Notification Act of 1989, 29 U.S.C. Section
2101 ET SEQ., as amended with respect to the respective employees of each such
company.

Section 4.03. EMPLOYMENT TAXES. (a) FTX and Company will (i) treat
Company as a "successor employer" and FTX as a "predecessor" within the meaning
of Sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to transferred
employees who are employed by the Company for purposes of Taxes imposed under
the United States Federal Unemployment Tax Act (FICA) or the United States
Federal Insurance Contribution Act (FUTA) and (ii) cooperate with each other to
avoid, to the extent possible, the filing of more than one Internal Revenue
Service form W-2 with respect to each such transferred employee for the calendar
year within which the Distribution Date occurs.

ARTICLE V
INDEMNIFICATION

Section 5.01 (a) BY FTX AND FRP. FTX and FRP jointly and severally
covenant and agree (except in the case of subsection (vii) of this Section
4.2(a), in which case FTX individually covenants and agrees) to defend,
indemnify and hold harmless the Company, its officers, directors,

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employees, agents, advisors, representatives, contractors, subcontractors,
and those entities that are Affiliates of the Company immediately following
the Effective Time and each of the heirs, executors, successors, and assigns
of any of the foregoing (collectively the "COMPANY INDEMNITEES"), from and
against, and pay or reimburse the Company Indemnitees for, any and all
claims, liabilities, obligations, losses, fines, costs, royalties, penalties,
proceedings, deficiencies, or damages (whether absolute or accrued,
conditional or otherwise, and whether or not resulting from third party
claims), including out-of-pocket expenses and reasonable attorneys' and
accountants' fees incurred in the investigation or defense of any of the same
or asserting any of their respective rights hereunder (collectively
"LOSSES"), to the extent resulting from or arising out of: (i) any failure
of FTX, FRP or any of their Affiliates to perform any covenant or agreement
hereunder or fulfill any other obligation in respect hereof; (ii) any
Excluded Liabilities; (iii) any Excluded Assets; (iv) any and all Taxes of
FTX, FRP and/or their respective Affiliates immediately following the
Effective Time relating to or arising out of the Transferred Businesses or
any Transferred Asset accruing, or with respect to any event or time period
occurring, at or prior to the Distribution Date and which FTX or FRP has
assumed responsibility pursuant to the provisions of this Agreement; (v) any
and all Liabilities in respect of employees of FTX, FRP or any of their
Affiliates prior to or as of the Distribution Date, except to the extent
expressly assumed by the Company pursuant to the Employee Benefits Agreement;
(vi) any failure of FTX, FRP or any of their Affiliates to comply with
applicable bulk sales laws (in consideration of which indemnification
obligation the Company hereby waives compliance by FRP, FTX and their
Affiliates with applicable bulk sales laws); or (vii) any breach of any
warranty or inaccuracy of any representation of FTX or FRP contained herein,
except, to the extent such Losses result from or arise out of the Assumed
Liabilities or constitute Losses for which the Company is required to
indemnify the FRP Indemnitees under Section 5.01(b).

(b) BY COMPANY. The Company covenants and agrees to defend, indemnify,
and hold harmless FRP and FTX and their respective officers, directors,
employees, agents, advisors, representatives, contractors, subcontractors and
those entities that are Affiliates of FRP and FTX immediately following the
Effective Time and each of the heirs, executors, successors, and assigns of any
of the foregoing (collectively, the "FRP INDEMNITEES") from and against any and
all Losses to the extent resulting from or arising out of: (i) any failure of
the Company to perform any covenant or agreement hereunder or fulfill any other
obligation in respect hereof; (ii) any Assumed Liabilities or Transferred
Assets; (iii) any and all Taxes relating to or arising out of the Transferred
Businesses or any Transferred Asset accruing, or with respect to any event or
time period occurring, subsequent to the Distribution Date or in respect of
which the Company has assumed responsibility pursuant to the provisions of this
Agreement; (iv) any Liabilities in respect of employees of FTX, FRP or their
Affiliates to the extent expressly assumed by the Company pursuant to the
Employee Benefits Agreement; except, to the extent such Losses result from or
arise out of the Excluded Liabilities or constitute Losses for which FRP and/or
FTX are required to indemnify Company Indemnitees under Section 5.01(a); or (v)
any breach of any warranty or inaccuracy of any representation of the Company
contained herein.

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<PAGE>

one hand, or by the Company to the FRP Indemnitees, on the other hand,
pursuant to this Article V in respect of any claim shall be net of any
insurance proceeds received by the Indemnified Party in respect of such
claim. The Indemnified Party shall use its reasonable efforts to pursue
insurance claims relating to any claim for which it is seeking
indemnification pursuant to this Section 5.01; PROVIDED that the Indemnified
Party shall not be obligated to pursue an insurance claim if the Indemnified
Party in its reasonable judgment believes the cost of pursing such an
insurance claim exceed the value of the claim for which the Indemnified Party
is seeking indemnification. If any Indemnitee shall have received the payment
required by this Agreement from an Indemnifying Party in respect of an
indemnifiable Loss and shall subsequently receive insurance proceeds, then
such Indemnitee shall pay to such Indemnifying Party a sum equal to the
amount of such insurance proceeds.

(d) INDEMNIFICATION PROCEDURES. In the case of any claim for
indemnification pursuant to this Agreement by a party entitled to
indemnification under this Agreement (the "INDEMNIFIED PARTY"), notice shall be
given by the Indemnified Party to the party required to provide indemnification
(the "INDEMNIFYING PARTY") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and the Indemnified
Party shall permit the Indemnifying Party (at the expense of such Indemnifying
Party) to assume the defense of any claim or litigation resulting therefrom,
PROVIDED that (i) the Indemnified Party may participate in such defense at such
Indemnified Party's expense, and (ii) the omission by any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
indemnification obligations under this Agreement except to the extent that such
omission results in a failure of actual notice to the Indemnifying Party and
such Indemnifying Party is materially damaged as a result of such failure to
give notice. Except with the prior written consent of the Indemnified Party, no
Indemnifying Party, in the defense of any such claim or litigation, shall
consent to the entry of any judgment or enter into any settlement that provides
for injunctive or other non-monetary relief affecting the Indemnified Party
where it does not include as an unconditional term thereof the giving by each
claimant or plaintiff to such Indemnified Party of a release from all Liability
with respect to such claim or litigation. Unless an Indemnifying Party elects
not to assume the defense of or to seek to settle or compromise a third party
claim, such Indemnifying Party shall not be liable to such Indemnitee under this
Article V for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof; and in the event that the
Indemnifying Party does not accept the defense of any matter as above provided,
the Indemnified Party shall have the full right to defend against any such claim
or demand and shall be entitled to settle or agree to pay in full such claim or
demand. In any event, the Indemnifying Party and the Indemnified Party shall
cooperate in the defense of any claim or litigation subject to this Section 5.01
and the records of each shall be available to the other with respect to such
defense. Upon written demand of an Indemnitee, an Indemnifying Party shall
reimburse such Indemnitee for all direct, out of pocket Losses reasonably
incurred by it in connection with investigating or defending any third party
claim at the request of the Indemnifying Party in advance of its final
disposition; PROVIDED, that such reimbursement need be made only upon delivery
to the Indemnifying Party of an undertaking by such Indemnitee to repay all
amounts so reimbursed or advanced if it shall ultimately be determined that such
Indemnitee is not entitled to indemnification under this Article V or otherwise.

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(e) All claims for indemnification under this Article V shall survive
indefinitely after the Effective Time.

ARTICLE VI
INFORMATION

Section 6.01. ACCESS TO INFORMATION. From and after the date hereof, each
party shall afford each other party and its accountants, counsel and other
designated representatives reasonable access (including using reasonable efforts
to give access to persons or firms possessing information) and duplicating
rights during normal business hours to all records, books, contracts,
instruments, computer data and other data and information in such party's
possession relating to the business and affairs of such other party (other than
data and information subject to any attorney/client or other privilege or
otherwise required to be kept confidential pursuant to binding agreements),
insofar as such access is reasonably required by such other party including,
without limitation, for audit, accounting and litigation purposes, as well as
for purposes of fulfilling disclosure and reporting obligations.

Section 6.02. LITIGATION COOPERATION. Each party shall use reasonable
efforts to make available to each other party, upon written request, the
officers, directors, employees and agents of such parties and those entities
that are Affiliates immediately following the Effective Time as witnesses to the
extent that such persons may reasonably be required in connection with any
Action arising out of the business of the Company and its predecessors in which
the requesting party may from time to time be involved.

Section 6.03. REIMBURSEMENT. Each party providing information or
witnesses under Sections 6.01 or 6.02 to any other party shall be entitled to
receive from the recipient, upon the presentation of invoices therefor, payment
for all reasonable, direct, out-of-pocket costs and expenses as may be
reasonably incurred in providing such information or witnesses.

Section 6.04. RETENTION OF RECORDS. Except as otherwise required by law
or agreed to in writing, each party shall preserve and retain all information
relating to each other party's business throughout the term of the and for a
period of seven (7) years thereafter.

ARTICLE VII
REPRESENTATIONS AND WARRANTIES

Section 7.01. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to FRP and FTX as follows:

(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation and has full corporate power and authority to enter into this
Agreement and perform its obligations hereunder and to own or lease its
properties and conduct its business as currently owned,

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leased or conducted or as proposed to be owned, leased or conducted by
reason of the transactions contemplated by this Agreement.

(ii) This Agreement, the Employee Benefits Agreement and the Tax
Cooperation Agreement have been duly authorized by the Company and, upon
the due execution and delivery hereof and thereof by the parties hereto and
thereto, will constitute valid and binding obligations of the Company
enforceable in accordance with their respective terms.

Section 7.02. REPRESENTATIONS AND WARRANTIES BY FTX. FTX represents and
warrants to FRP and the Company as follows:

(i) FTX has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Delaware and has full
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.

(ii) This Agreement, the Employee Benefits Agreement and the Tax
Cooperation Agreement have been duly authorized by FTX and, upon the due
execution and delivery hereof and thereof by the parties hereto and
thereto, will constitute valid and binding obligations of FTX enforceable
in accordance with their respective terms.

Section 7.03. REPRESENTATIONS AND WARRANTIES BY FRP. FRP represents and
warrants to FTX and the Company as follows:

(i) FRP is validly existing as a limited partnership under the
provisions of the Delaware Revised Uniform Limited Partnership Act and has
full partnership power and authority to enter into this Agreement and
perform its obligations hereunder.

(ii) This Agreement has been duly authorized, executed and delivered
by FRP and, assuming the due execution and delivery hereof by the other
parties hereto, constitutes a valid and binding obligation of FRP
enforceable in accordance with its terms.

ARTICLE VIII
MISCELLANEOUS

Section 8.01. EXPENSES. FTX shall bear the expenses, costs and fees
(including attorneys', auditors' and financing commitment fees) in connection
with the Merger, the Contributions and the Distribution, except as set forth in
the following sentence. The listing fees of the N.Y.S.E. incurred with respect
to the listing of the Company Common Stock, the printing and mailing costs
relating to the Form 10 and Registration Statement, the filing fees with the
Commission in connection with the Distribution, the costs of the Distribution
Agent, any filing or recordation costs associated with the Contributions, and
any sales, use, transfer, stamp, recording, documentary or similar Taxes or
charges arising out of the Contributions will be divided evenly between FTX and
the Company.

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Section 8.02. NOTICES. All notices, requests and other communications
under this Agreement to any party hereto shall be in writing (including
facsimile or similar writing) and shall be given

If to FTX, to:

Freeport-McMoRan Inc.
1615 Poydras Street
New Orleans, LA 70112
Attention: General Counsel
Telecopier: (504) 582-4227

With a copy to:

IMC Global, Inc.
2100 Sanders Road
Northbrook, IL 60062
Attention: General Counsel
Telecopier: (847) 205-4894

If to FRP, to:

Freeport-McMoRan Resource Partners
Limited Partnership
c/o Freeport-McMoRan Inc.
1615 Poydras Street
New Orleans, LA 70112
Attention: General Counsel
Telecopier: (504) 582-4227

With a copy to:

IMC Global, Inc.
2100 Sanders Road
Northbrook, IL 60062
Attention: General Counsel
Telecopier: (847) 205-4894

If to the Company, to:

Freeport Sulphur Company
1615 Poydras Street
New Orleans, Louisiana 70112

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Attention: President
Telecopier: (504) 582-1611

or to such other address or telecopier number as such party may hereafter
specify for the purpose by notice to the other parties. Each such notice,
request or other communication shall be effective (i) if given by facsimile,
when such facsimile is transmitted to the telecopier number specified in this
Section and transmission of the appropriate number of pages is confirmed or
(ii) if given by any other means, when delivered at the address specified in
this Section 8.02.

Section 8.03. AMENDMENT AND WAIVER. This Agreement may not be altered or
amended, nor may rights hereunder be waived, except by an instrument in writing
executed by each party, or in the case of a waiver by an instrument in writing
executed by the party against whom such waiver is to be effective.
Notwithstanding anything contained herein to the contrary, prior to the
Effective Time, this Agreement may not be altered or amended, nor may FTX or FRP
waive any of its respective rights hereunder, without the express written
consent of IGL. No waiver of any term, provision or condition of or failure to
exercise or delay in exercising any rights or remedies under this Agreement, in
any one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, provision, condition, right or remedy or as
a waiver of any other term, provision or condition of this Agreement.

Section 8.04. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original instrument but all of
which together shall constitute but one and the same Agreement.

Section 8.05. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE.

Section 8.06. ENTIRE AGREEMENT. This Agreement and the attachments hereto
(and, in the case of FTX and IGL, the Agreement and Plan of Merger and the
attachments thereto) constitute the entire understanding of the parties hereto
with respect to the subject matter hereof, superseding all negotiations, prior
discussions and prior agreements and understandings relating to such subject
matter.

Section 8.07. PARTIES IN INTEREST. This Agreement shall be binding upon,
and shall inure to the benefit of, each of the parties hereto and their
respective successors and permitted assigns (which shall include IGL as a result
of the Merger). Nothing contained in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties hereto, any
benefits, rights or remedies, provided, however, that notwithstanding anything
contained herein to the contrary, it is expressly agreed that IGL is an express
third party beneficiary of the rights of FRP and FTX hereunder by virtue of the
transactions contemplated by the Agreement and Plan of Merger between FTX and
IGL.

-25-
<PAGE>

Section 8.08. SPECIFIC ENFORCEMENT. Each party acknowledges that the
other parties hereto would be irreparably harmed by any breach of any of the
terms or conditions of this Agreement and that there would be no adequate remedy
at law or in damages to compensate such party for such breach. Each party
agrees that any other party shall be entitled to injunctive relief requiring
specific performance by the parties hereto of any provision of this Agreement,
and each of the parties consents to the entry thereof.

Section 8.09 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any party hereto without
the prior written consent of the other party.

Section 8.10 SEVERABILITY. If any term or provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other terms, provisions and conditions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party hereto. Upon any determination that any term or
other provision hereof is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of such parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
may be consummated as originally contemplated to the fullest extent possible.

Section 8.11 FTX ALLOCATION TO FRP. Nothing in this Agreement shall
preclude FTX or any successor thereto from allocating any expenses for which it
is responsible hereunder to FRP to the extent that it is permitted to do so
under the Partnership Agreement.

[SIGNATURES ON NEXT PAGE]

-26-
<PAGE>

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

Freeport-McMoRan Resource Partners,
Limited Partnership

By: Freeport-McMoRan Inc., its Administrative
Managing General Partner and Special General
Partner

By: /s/ Rene L. Laitolais
--------------------------------------------
Name: Rene L. Latiolais
Title: President and Chief Executive
Officer

Freeport-McMoRan Inc.

By: /s/ Rene L. Laitolais
--------------------------------------------
Name: Rene L. Latiolais
Title: President and Chief Executive
Officer

Freeport Sulphur Company

By: /s/ Robert M. Wohleber
--------------------------------------------
Name: Robert M. Wohleber
Title: President

<PAGE>
EXHIBIT A

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), is made and
entered into as of the ___ day of __________, 1997, by and between IMC Global
Operations Inc., a Delaware corporation (together with its successors and
assigns, "Assignor") and Freeport-McMoRan Resource Partners, Limited
Partnership, a Delaware limited partnership (together with its successors and
assigns,"Assignee").

W I T N E S S E T H:

WHEREAS, Assignor holds an interest in certain sulphur and oil and gas
producing properties and certain facilities and other interests relating
thereto; and

WHEREAS, in connection with the proposed merger between Assignor's parent
company, IMC Global Inc., and an Affiliate of Assignor, Freeport-McMoRan Inc.,
(the "Merger"), Assignor hereby agrees to transfer to Assignee the interest in
the sulphur and oil and gas producing properties and the facilities and other
interests relating thereto which are identified herein.

NOW, THEREFORE, in consideration of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Assignor and
Assignee, Assignor and Assignee hereby agree as follows:

1. DEFINITIONS. As used herein, the following terms, when capitalized,
shall have the following meanings, unless the context dictates otherwise:

"Affiliate" means with respect to any Person, any Person that directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person. As used in this definition, the term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the Person, whether
through ownership of voting securities, by contract or credit agreement, as
trustee or executor or otherwise.

<PAGE>

EXHIBIT A

"Code" means the Internal Revenue Code of 1986, as amended.

"Containment" means any waste, pollutant, hazardous or toxic substance or
waste, petroleum, petroleum-based substance or waste, special waste, or any
constituent of any such substance or waste.

"Fertilizer Business" means the business conducted by IMC-Agrico Company.

2
<PAGE>
EXHIBIT A

"Leased Real Property" means all interests (including offshore acreage)
leased pursuant to the Leases, together with all structures, facilities,
improvements, fixtures, systems, equipment, and items of real property which are
owned or leased by Assignor and presently located on the real property or other
acreage subject to the Leases, and all of Assignor's right, title and interest
in and to all easements, servitudes, licenses, rights, rights-of-way, operating
rights, franchises and appurtenances relating to the foregoing.

"Leases" means the leases set forth on Schedule 1 hereto.

"Permit" means any foreign, federal, state, municipal and local permit,
license, registration, consent, order, administrative consent order,
certificate, approval or other authorization with respect to Assignor necessary
for the ownership or use of any Asset or the conduct of the Transferred Business
as it is currently conducted or has been previously conducted.

"Person" means any natural person, firm, partnership, limited liability
company, association, corporation, company, trust, business trust, Governmental
Authority or other entity.

"Release" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration of a Contaminant
into the indoor or outdoor environment or into or out of any Leased Real
Property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater or Leased Real Property.

3
<PAGE>
EXHIBIT A

remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.

"Transferred Businesses" means, collectively: (i) the businesses and
operations of Assignor to the extent relating to the exploration, production,
development, processing, transportation, storage, terminalling, sale, purchase
or marketing of sulphur, in whatever form, and of sulphuric acid, or the
provision of other services in connection therewith, including, without
limitation, the operations conducted from the Leased Real Property, but
expressly excluding the purchase and processing of sulphur by IMC-Agrico
Company; (ii) the businesses and operations of Assignor to the extent relating
to the exploration, production, development, processing, transportation, sale,
purchase or marketing of Hydrocarbons produced or allocable to the Leased Real
Property, or the provision of other services in connection therewith; (iii) to
the extent not already included in the description set forth in (i) or (ii) of
this definition, all businesses and operations located on the Leased Real
Property or using or consuming any of the Assets.

2. ASSIGNMENT. Assignor hereby conveys, sells, assigns, transfers and
delivers to Assignee any and all right, title and interest of Assignor in or to
(collectively, the "Assets"):

(i) The assets listed on Schedule 1 attached hereto and made a part
hereof;

(ii) All of the assets physically located on any of the Leased Real
Property;

(iii) All books, records and information of Assignor recorded on
any form of media whether owned, leased or licensed by Assignor, including
magnetic disk, computer drives or microfiche, to the extent the same
primarily relate to and primarily used by or primarily in connection with
the Transferred Business or any Asset; all advertising materials, catalogs,
price lists, correspondence, mailing lists, lists of customers,
distribution lists, photographs, production data, sales and promotional
materials and records, purchasing materials and records, personnel records,
manufacturing and quality control records and

4
<PAGE>
EXHIBIT A

procedures, blueprints, specifications, drawings, schematics, research and
development files, records, data and laboratory books, Intellectual
Property filings or registrations, media materials and plates, accounting
records, sales order files, litigation files, logs, seismic and geophysical
information, geological and chemical data and information, reserve studies
and evaluations, fluid samples, well cores, title abstracts and opinions,
production data and reports, well testing data and reports, and maps, to
the extent that same primarily relate to and are used primarily by or
primarily in connection with the Transferred Business or any Asset;

(iv) All cash, credits, prepaid expenses, amounts on deposit,
deferred charges, advance payments, security deposits and prepaid items
owned by, accrued in favor of or held by Assignor thereof to the extent
relating primarily to the Transferred Businesses or any Asset;

(v) All notes, accounts receivable, rights to payment or other
evidence of indebtedness generated by Assignor primarily in connection with
the Transferred Businesses or any Asset; all cash and cash equivalents paid
in respect of any such notes, accounts receivable, rights to payment or
other indebtedness; and all Liens, letters of credit, guarantees or bonds
to secure the payment of all such amounts;

(vi) All of the right, title and interest of Assignor in and to all
contracts and agreements between Assignor, on the one hand and any third
party to the extent made by or for the primary benefit of the Transferred
Businesses or any Asset; provided that the Assignor assigns the rights
under the Agreement for Sulphur Supply dated as of July 1, 1993 (the "IMCAC
Sulphur Agreement") among Assignor, Assignee and IMC-Agrico Company
("IMCAC") other than its rights to act as a buyer on behalf of IMCAC;

(vii) All asserted and unasserted Actions now owned by Assignor
and that are related primarily arise primarily out of the Transferred
Businesses or any of the Assets, including any claim for royalty refunds or
rebates from any land owner, including the United States, and any claim for
balancing of Hydrocarbons;

(viii) All Consents and Permits held by Assignor for the primary
benefit of the Transferred Businesses or any Asset;

(ix) All machinery, equipment, furniture, furnishings, automobiles,
trucks, vehicles, vessels, boats, aircraft, tools, dies, molds, wells,
casing, tubing, pumping units, engines, platforms, derricks, separators,
compressors, flow lines, tanks, pipelines, chemicals, power generation and
transmission equipment, communication systems, meters, motors, parts and
similar property (including, but not limited to, any of the foregoing
purchased

5
<PAGE>
EXHIBIT A

subject to any conditional sales or title retention agreement in favor of
any other Person or subject to any financed lease in favor of any other
Person) to the extent used primarily in connection with the Transferred
Businesses or any Asset;

(x) All servitudes, easements, rights of way, operating rights,
exploration rights, sharing agreements, balancing agreements, pooling or
unitization agreements, farmout or farming agreements, unit designation and
pooling orders or other rights or agreements which bear primarily upon or
are for the primary benefit of the Transferred Businesses or any Asset;

(xi) All sulphur, Hydrocarbons or other minerals to the extent
produced from or are allocable to the interest of Assignor in and to any of
the Leased Real Property.

(xii) All Intellectual Property owned or licensed by Assignor and
all rights thereunder or in respect thereof to the extent relating
primarily to or used primarily or held primarily for use in connection with
the Transferred Businesses or any Asset, including, but not limited to,
rights to sue for and remedies against past, present and future
infringements thereof, and rights of protection of interests therein under
the laws of any jurisdiction worldwide; and

(xiii) The Leases.

3. ASSUMPTION OF ASSUMED LIABILITIES. Subject to the terms and
conditions set forth in this Agreement, Assignee shall assume and agree to pay,
honor and discharge when due, and take all action necessary or appropriate under
Applicable Law to assume, effective on or prior to the date hereof, all
Liabilities arising from or in connection with the ownership, acquisition,
conduct or operation (past, present or future) of the Transferred Businesses (or
any predecessor to the Transferred Businesses) or any Assets or relating to the
ownership or use of the Assets, whether arising before, on or after the date
hereof and whether related to the current, past or future operations of the
Transferred Businesses (collectively, the "ASSUMED LIABILITIES"). Without
limitation of the foregoing, Assumed Liabilities include:

(a) Any and all Liabilities related to the contracts and agreements
described in Section 2 above;

(b) (ii) All Liabilities related to, associated with or arising out
of (A) the occupancy, operation, use or control of any of the Leased Real
Property, (B) the operations of the Transferred Businesses (or any
predecessor thereto), in each case incurred under or imposed by any
Environmental Law (including without limitation any Release or threatened
Release of any Contaminant on, in, at, to, beneath or from the Leased Real
Property, including, without limitation, all facilities, improvements,
structures and equipment thereon,

6
<PAGE>
EXHIBIT A

surface water thereon or adjacent thereto and soil or groundwater
thereunder or any conditions whatsoever on, in, at, under or in the
vicinity of such real property), (C) the generation, handling
transportation, storage, discharge or disposal of any Contaminant in
connection with the Transferred Businesses, (D) any Remedial Action
required under any Environmental Law in connection with the Transferred
Businesses; or (E) any violation of any Environmental Law in connection
with the operations of the Transferred Businesses;

(c) Any sales, use, transfer, stamp, recording, documentary or
similar Taxes or any fees and disbursements of counsel, accountants, real
estate agents, appraisers, financial advisors, actuaries, consultants or
title companies or other similar charges, in each case arising out of the
assignment, transfer or delivery to the Company of the Transferred
Businesses or Assets pursuant to Section 2 in each case; and

(d) Any Liabilities arising out of or related to litigation related
to the current, past or future operations of the Transferred Businesses.

4. CONSENTS. In the event that Assignor shall be unable to transfer any
of the Assets to Assignee prior to the date hereof due to the failure of
Assignor to obtain any necessary Consents, Assignor: (i) shall continue to seek
the necessary Consents, in accordance with this Agreement; (ii) shall hold such
Assets for the benefit of Assignee and cooperate with Assignee in any lawful and
economically feasible arrangement to insure that Assignee shall receive the
benefits thereof, (iii) shall hold or cause to be held for the account of
Assignee all accounts receivable or accounts payable related to Assignee's
interest in any such Assets accrued as, and accruing after, the date hereof,
(iv) shall make available to Assignee all information relating to such Assets to
the extent making such information available is permitted by Applicable Law and
the contractual arrangements relating to such Assets, (v) shall not assign,
transfer, otherwise dispose of or grant a Lien upon any such Assets to any
Person other than Assignee, and (vi) shall upon obtaining the necessary Consents
relating to such Assets, promptly take such action as may be necessary to
complete the transfer to Assignee of such Assets, including without limitation,
all accrued accounts payable and accrued accounts receivable related to such
Assets. Any transfer of an Asset after the date hereof shall be effective as of
the date hereof.

5. FURTHER ASSURANCES.

(a) The transfer of the Assets and the assumption of the liabilities
and obligations contemplated herein shall be further evidenced by the execution
and delivery by the parties hereto of such acts of transfer, conveyance and
assumption as may be reasonably requested by any party. Each of the parties
hereto will execute and deliver, and cause all other relevant Persons to execute
and deliver, such further instruments of conveyance, assumption and assignment
and will take such

7
<PAGE>
EXHIBIT A

other actions (including, without limitation, (i) any changes or amendments
to or redelivery of such instruments of conveyance, assumption and assignment
that may be necessary to vest in the Assignee title to or other applicable
rights in the Assets and (ii) the delivery of originals of stock certificates
and other similar documents of title) as any other party may reasonably
request in order to effectuate the purposes of this Agreement.

(b) Assignor shall execute and deliver such further instruments of
conveyance, assumption and assignment and shall take such other actions,
including, without limitation, any changes or amendments to or redelivery of
such instruments of conveyance, assumption and assignment, that may be necessary
to vest in the Assignee title to or other applicable rights in the Assets,
including without limitation any assets that may arise in the future. Without
limiting the foregoing in any manner, Assignor shall immediately notify the
appropriate Assignee in the event Assignor obtains knowledge of or reason to
believe that certain assets have not been properly transferred to Assignee and
shall take all action necessary to have such assets properly transferred to
Assignee as set forth herein.

(c) Notwithstanding anything herein to the contrary, Assignor agrees
to cause IMCAC prior to the date of the Merger (i) to consent to the assignment
to Assignee of Assignor's interest in the IMCAC Sulphur Agreement; and (ii) to
execute an amendment to the IMCAC Sulphur Agreement reasonably necessary to
reflect the fact that Assignee is the successor in interest to Assignor and that
the rights and obligations of the parties have been divided as set forth in
Section 2(a)(vi) above. In addition to the foregoing, Assignee and IMC Global
Inc. (which will become the indirect parent of IMCAC following the Merger) have
previously executed a letter agreement clarifying the provisions of Section III
of the IMCAC Sulphur Agreement.

6. "AS-IS, WHERE-IS." Each of the parties hereto understands and agrees
that no party hereto is, in this Agreement or in any other agreement or document
contemplated by this Agreement or otherwise, representing or warranting in any
way (a) as to the value or freedom from encumbrance of, or any other matter
concerning, any of the Assets or (b) as to the legal sufficiency to convey title
to any Asset, it being understood that except as otherwise set forth in this
Agreement or in any ancillary transfer document, the Assets are being conveyed
"As-is, Where-is," except for rights or actions in warranty against predecessors
in title (other than Assignor or any prior or current Affiliates thereof). It
is understood and agreed that Assignee shall bear the economic and legal risk
that any conveyance of the Assets shall prove to be insufficient or that
Assignor's title to any such assets shall be other than good and marketable and
free from encumbrances. Similarly, each party hereto understands and agrees
that no party hereto is representing or warranting in any way that the obtaining
of any Consents or approvals or the making of any filings or applications
contemplated by this Agreement will satisfy the provisions of any or all
applicable agreements or the requirements of any or all applicable laws or
judgments, it being agreed and understood that Assignee shall bear the economic
and legal risk that any necessary Consents are not obtained or that any
requirements

8
<PAGE>
EXHIBIT A

of law or judgments are not complied with. Notwithstanding the foregoing,
the parties shall use reasonable efforts to obtain all Consents, and to make
all filings and applications which may be required for the consummation of
the transactions contemplated by this Agreement, including, without
limitation, all applicable regulatory filings or consents under federal or
state environmental laws.

7. CONSENTS. Assignor and Assignee hereby acknowledge that, under
certain conditions, under certain of the contracts and agreements described on
Schedule 1 hereto, Homestake Mining Company (formerly Felmont Oil Corporation)
may have a right of first refusal and a right to consent to certain transfers of
Assignor's rights and interests under such documents (the "Homestake Refusal
Right"). Without acknowledging that any of the transfers made pursuant to this
Agreement are subject to the Homestake Refusal Right, Assignor and Assignee
hereby agree as follows:

(a) Assignor agrees that it will comply with the instructions of Assignee
with respect to whether and in what manner Assignor treats any of the
assignments described in this Agreement as being subject to the Homestake
Refusal Right:;

(b) Assignor agrees that it will structure the assignments pursuant to
this Agreement in any manner that Assignee reasonably requests, including,
without limitation, as a contribution of the Transferred Businesses and the
Assets into a newly-formed subsidiary followed by a transfer of the stock of
said subsidiary; and

(c) Assignee hereby covenants and agrees to defend, indemnify and hold
harmless Assignor and its officers, directors, employees, agents, advisors,
representatives, contractors and subcontractors and each of their respective
heirs, executors, successors and assigns from and against all claims,
liabilities, obligations, losses, fines, costs, royalties, penalties,
proceedings, deficiencies, or damages (whether absolute or accrued, conditional
or otherwise and whether or not resulting from third party claims), including
out-of-pocket expenses and reasonable attorneys' and accountants' fees incurred
in the investigation or defense of any of the same or asserting any of their
respective rights hereunder, to the extent resulting from or arising out of the
compliance by Assignor with any of the directions or requests made by Assignee
in respect of subsections (a) and (b) of this section.

8. NOTICES. All notices, requests and other communications under this
Agreement to any party hereto shall be in writing (including facsimile or
similar writing) and shall be given

9
<PAGE>
EXHIBIT A

If to Assignor, to:

IMC Global Operations Inc.
2100 Sanders Road
Northbrook, Illinois 60662
Attention: General Counsel
Telecopier: (847) 205-4894

If to Assignee, to:

Freeport-McMoRan Resource Partners, Limited Partnership
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: General Counsel
Telecopier: (504) 582-4227

9. AMENDMENT AND WAIVER. This Agreement may not be altered or amended,
nor may rights hereunder be waived, except by an instrument in writing executed
by each party, or in the case of a waiver by an instrument in writing executed
by the party against whom such waiver is to be effective. No waiver of any
term, provision or condition of or failure to exercise or delay in exercising
any rights or remedies under this Agreement, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, provision, condition, right or remedy or as a waiver of any other term,
provision or condition of this Agreement.

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

11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH,
AND GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.

10
<PAGE>
EXHIBIT A

ASSIGNOR

IMC GLOBAL OPERATIONS INC.

By:
-------------------------------------
Name:
Title:

ASSIGNEE

FREEPORT-MCMORAN RESOURCE PARTNERS, LIMITED
PARTNERSHIP

By:
-------------------------------------
Name:
Title:

11
<PAGE>
EXHIBIT A

This Exhibit excludes Schedule 1 to the Assignment and Assumption
Agreement which contained a general description of certain assets, contracts
and agreements being assigned to the Company. The Company will furnish the
Commission a copy of this Schedule upon request.

<PAGE>
COMPOSITE COPY
OF THE
CERTIFICATE OF INCORPORATION
OF
FREEPORT-MCMORAN SULPHUR INC.

ARTICLE I
NAME

The name of this corporation is Freeport-McMoRan Sulphur Inc. (the
"Corporation").

ARTICLE II
REGISTERED OFFICE AND REGISTERED AGENT

The address of the Corporation's registered office in the State of Delaware
and its registered agent at such address is:

The Corporation Trust Company
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
County of New Castle

ARTICLE III
PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the Delaware General Corporation
Law (the "DGCL") .

ARTICLE IV
CAPITAL

1. AUTHORIZED STOCK. The Corporation shall be authorized to issue an
aggregate of 150,000,000 shares of capital stock, of which 100,000,000 shares
shall be Common Stock, $.01 par value per share (the "Common Stock"), and
50,000,000 shares shall be Preferred Stock, $.01 par value per share (the
"Preferred Stock").

2. PREFERRED STOCK. Preferred Stock may be issued from time to time in
one or more series. All shares of any one series of Preferred Stock shall be
identical except as to the dates of issue and the dates from which dividends on
shares of the series issued on different dates will cumulate if cumulative.

(a) Authority is hereby expressly granted to the Board of Directors
to authorize the issuance of one or more series of Preferred Stock, and to
fix by resolution or resolutions providing for the issuance of each such
series the voting powers, designations,

<PAGE>

preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions of such series, to the
full extent now or hereafter permitted by law, including, without
limitation, the following:

(1) the number of shares of such series, which may subsequently
be increased, except as otherwise provided by the resolution or
resolutions of the Board of Directors providing for the issuance of
such series, or decreased, to a number not less than the number of
shares of such series then outstanding, by resolution or resolutions
of the Board of Directors, and the distinctive designation thereof;

(2) the dividend rights of such series, the preferences, if any,
over any other class or series of stock, or of any other class or
series of stock over such series, as to dividends, the extent, if any,
to which shares of such series will be entitled to participate in
dividends with shares of any other series or class of stock, whether
dividends on shares of such series will be fully, partially or
conditionally cumulative, or a combination thereof, and any
limitations, restrictions or conditions on the payment of such
dividends;

(3) the rights of such series, and the preferences, if any, over
any other class or series of stock, or of any other class or series of
stock over such series, in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation and the
extent, if any, to which shares of any such series will be entitled to
participate in such event with any other series or class of stock;

(4) the time or times during which, the price or prices at
which, and the terms and conditions on which the shares of such series
may be redeemed;

(5) the terms of any purchase, retirement or sinking funds that
may be provided for the shares of such series; and

(6) the terms and conditions, if any, upon which the shares of
such series will be convertible into or exchangeable for shares of any
other series, class or classes, or any other securities.

(b) The shares of Preferred Stock shall have no voting power or
voting rights with respect to any matter whatsoever, except as may be
otherwise required by law or may be provided in the resolution or
resolutions of the Board of Directors creating the series of Preferred
Stock of which such shares are a part.

(c) No holders of any series of Preferred Stock will be entitled to
receive any dividends thereon other than those specifically provided for by
the Certificate of Designation providing for the issuance of such series of
Preferred Stock, nor will any accumulated dividends on Preferred Stock bear
any interest.

<PAGE>

(d) In the event of any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, the holders of Preferred
Stock of each series will be entitled to receive only such amount or
amounts as will have been fixed by the Certificate of Designation for the
issuance of such series.

ARTICLE V
INCORPORATOR

The name and address of the incorporator of the Corporation is:

Robert M. Wohleber
1615 Poydras Street
New Orleans, Louisiana 70112

ARTICLE VI
STOCKHOLDER ACTION

Action shall be taken by the stockholders only at an annual or special
meeting of stockholders and may not be effected by any written consent of such
holders.

ARTICLE VII
BOARD OF DIRECTORS

1. POWERS. All of the powers of the Corporation are hereby conferred
upon the Board of Directors of the Corporation, insofar as such powers may be
lawfully vested by this Certificate of Incorporation in the Board of Directors.
In furtherance and not in limitation of those powers, the Board of Directors
shall have the power to make, adopt, alter, amend and repeal from time to time
the Corporation's Bylaws, subject to the provisions of Article X, section 2.

2. NUMBER OF DIRECTORS. Subject to the restriction that the number of
directors shall not be less than the number required by the DGCL, the number of
directors may be fixed from time to time pursuant to the Corporation's Bylaws;
provided, however, that the number of directors shall not be reduced so as to
shorten the term of any director at the time in office.

3. CLASSIFICATION. The members of the Board of Directors, other than
those who may be elected by the holders of any one or more series of Preferred
Stock voting separately, shall be classified, with respect to the term during
which they shall hold office, into three classes, designated Class I, II and
III, as nearly equal in number as possible. Any increase or decrease in the
number of directors shall be apportioned by the Board of Directors so that all
classes of directors shall be as nearly equal in number as possible. At each
annual meeting of stockholders, directors chosen to succeed those whose terms
then expire shall be elected to hold office for a term expiring at the annual
meeting of stockholders held in the third year following the year of their
election and until their successors are duly elected and qualified.

<PAGE>

4. VACANCIES. Subject to any requirements of law and the rights of any
class or series of Capital Stock having a preference over the Common Stock as to
dividends or upon liquidation, and except as provided in Article VII, section 6,
any vacancy on the Board of Directors (including any vacancy resulting from an
increase in the authorized number of directors or from a failure of the
stockholders to elect the full number of authorized directors) may,
notwithstanding any resulting absence of a quorum of directors, be filled only
by the Board of Directors, acting by vote of both (a) a majority of the
directors then in office and (b) a majority of all the Continuing Directors,
voting as a separate group, and any director so appointed shall serve until the
next stockholders' meeting held for the election of directors of the class to
which such director shall have been appointed and until his successor is duly
elected and qualified.

5. REMOVAL. Subject to Article VII, section 6, and notwithstanding any
other provisions of this Certificate of Incorporation or the Corporation's
Bylaws, any director or the entire Board of Directors may be removed at any
time, but only for cause involving fraud or a violation of the duty of loyalty
as determined by a final judgment of a court of competent jurisdiction, and only
by the affirmative vote of holders of not less than 80% of the Voting Stock,
voting together as a single class, at a stockholders' meeting called for such
purpose. At the same meeting in which the stockholders remove one or more
directors, the stockholders may elect one or more successors for the unexpired
term or terms of the director or directors removed. Except as set forth in this
Article VII, section 5, directors shall not be subject to removal.

6. DIRECTORS ELECTED BY PREFERRED STOCKHOLDERS. Notwithstanding anything
in this Certificate of Incorporation to the contrary, whenever the holders of
any one or more series of Preferred Stock shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
provisions of this Certificate of Incorporation (as amended from time to time)
fixing the rights and preferences of such Preferred Stock shall govern with
respect to the nomination, election, term, removal, vacancies or other related
matters with respect to such directors.

ARTICLE VIII
CERTAIN BUSINESS COMBINATIONS

1. SUPERMAJORITY VOTE. In addition to any affirmative vote required by
law or this Certificate of Incorporation (notwithstanding the fact that a lesser
percentage may be specified by law or this Certificate of Incorporation) and
except as otherwise expressly provided in Article VIII, section 2:

(a) any merger, consolidation or share exchange of the Corporation or
any Subsidiary with an Interested Stockholder or with any other
corporation, whether or not itself an Interested Stockholder, which is, or
after such merger, consolidation or share exchange would be, an Affiliate
or Associate of an Interested Stockholder;

(b) any sale, lease, transfer, exchange, mortgage, pledge, loan,
advance or other similar disposition (in one or more series of
transactions), with or for the direct or indirect benefit of any Interested
Stockholder or any Affiliate or Associate thereof, of any assets of the
Corporation or any Subsidiary having, measured at the time the transaction
or

<PAGE>

transactions are approved by the Board of Directors, an aggregate book
value or Market Value as of the end of the Corporation's most recently
ended fiscal quarter of 5% or more of the lesser of (i) the total Market
Value of the outstanding stock of the Corporation or (ii) the Corporation's
net worth as of the end of its most recently ended fiscal quarter;

(d) the issuance or transfer by the Corporation or any Subsidiary, in
one transaction or in a series of transactions in any twelve-month period,
of any Equity Securities of the Corporation or any Subsidiary that have an
aggregate Market Value of $1 million or more to any Interested Stockholder
or any Affiliate or Associate thereof, except pursuant to the exercise of
warrants or rights to purchase securities offered pro rata to all holders
of the Corporation's Voting Stock or by any other method affording
substantially proportionate treatment to the holders of Voting Stock;

(e) any reclassification or recapitalization of securities of the
Corporation, including any reverse stock split, any merger, consolidation
or share exchange of the Corporation with any Subsidiary, or any other
transaction (whether or not involving an Interested Stockholder) that has
the effect, directly or indirectly, in one transaction or a series of
transactions, of increasing by 5% or more the voting power (regardless of
when exercisable) or the proportionate amount of the outstanding shares of
any class or series of Equity Securities of the Corporation or any
Subsidiary directly or indirectly Beneficially Owned by any Interested
Stockholder or any Affiliate or Associate thereof;

(f) any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by the
Corporation or any Subsidiary to an Interested Stockholder or any Affiliate
or Associate thereof, except proportionately as a stockholder; or

(g) any agreement, contract or other arrangement providing directly
or indirectly for any of the foregoing;

shall require (i) the approval by a majority of both the directors then in
office and a majority of the Continuing Directors, voting as a separate group,
and (ii) the affirmative vote of both (A) holders of not less than 80% of the
Voting Stock, voting together as a single class, and (B) holders of not less
than 75% of the Voting Stock (other than Voting Stock Beneficially Owned by the
Interested Stockholder who is, or whose Affiliate or Associate is, a party to
the proposed Business Combination) voting as a separate class. In addition, a
proxy or information statement describing the proposed Business Combination and
complying with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder shall be mailed to all stockholders of the
Corporation at least 30 days prior to the consummation of such Business
Combination (regardless of whether such proxy or information statement is
required pursuant to such act).

<PAGE>

2. EXCEPTIONS TO SUPERMAJORITY VOTE REQUIREMENTS. If all conditions
specified in either of paragraphs (a) or (b) below are met, the provisions of
Article VIII, section 1, shall not be applicable to any Business Combination,
and such Business Combination shall require only such vote, if any, as may be
required by any other provisions of this Certificate of Incorporation or the
Corporation's Bylaws, as well as such vote, if any, of the holders of any class
or series of stock of the Corporation as may be required by law, and shall
further require only the delivery of such proxy or information statements, if
any, as may be required by law:

(a) The Business Combination shall have been approved prior to the
time such Interested Stockholder became an Interested Stockholder by a
majority of the directors then in office and a majority of the Continuing
Directors, voting as a separate group; or

(b) All of the following five conditions have been met:

(1) The aggregate amount of the cash and the Market Value as of
the Valuation Date of consideration other than cash to be received per
share by holders of Common Stock in such Business Combination is at
least equal to the highest of the following:

(A) the highest per share price, including any brokerage
commissions, transfer taxes and soliciting dealer's fees, paid by
the Interested Stockholder for any shares of Common Stock
acquired by it within the two-year period immediately prior to
the Announcement Date or in the transaction in which it became an
Interested Stockholder, whichever is higher;

(B) the Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is
higher; or

(C) the price per share equal to the Market Value per share
of Common Stock determined pursuant to clause (B) immediately
preceding, multiplied by a fraction, the numerator of which is
the highest per share price, including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the
Interested Stockholder for any shares of Common Stock acquired by
it within the two-year period immediately prior to the
Announcement Date, and the denominator of which is the Market
Value per share of Common Stock on the first date in such two-
year period on which the Interested Stockholder acquired any
shares of Common Stock.

(2) The aggregate amount of the cash and the Market Value as of
the Valuation Date of consideration other than cash to be received per
share by holders of shares of any class or series of outstanding stock
other than Common Stock is at least equal to the highest of the
following, whether or not the Interested Stockholder has previously
acquired any shares of any such class or series of stock:

<PAGE>

(A) the highest per share price, including any brokerage
commissions, transfer taxes and soliciting dealers' fees, paid by
the Interested Stockholder for any shares of such class or series
of stock acquired by it within the two-year period immediately
prior to the Announcement Date or in the transaction in which it
became an Interested Stockholder, whichever is higher;

(B) the highest preferential amount per share to which the
holders of shares of such class or series of stock are entitled
in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;

(C) the Market Value per share of such class or series of
stock on the Announcement Date or on the Determination Date,
whichever is higher; or

(D) the price per share equal to the Market Value per share
of such class or series of stock, determined pursuant to clause
(C) immediately preceding, multiplied by a fraction, the
numerator of which is the highest per share price, including any
brokerage commissions, transfer taxes and soliciting dealers'
fees, paid by the Interested Stockholder for any shares of any
such class or series of Voting Stock acquired by it within the
two-year period immediately prior to the Announcement Date, and
the denominator of which is the Market Value per share of the
same class or series of voting stock on the first day in such
two-year period on which the Interested Stockholder acquired any
shares or the same class or series of Voting Stock.

(3) The holders of any class or series of the Corporation's
outstanding stock shall receive the consideration in cash or in the
same form as the Interested Stockholder has previously paid for shares
of the same class or series of stock. If the Interested Stockholder
has paid for shares of any class of stock with varying forms of
consideration, the form of consideration for such class of stock shall
be either in cash or the form used to acquire the largest number of
shares of such class or series of stock previously acquired by it. In
making any price calculation under paragraph (b) of Article VIII,
section 2, appropriate adjustments shall be made to reflect any
reclassification or stock split (including any reverse stock split),
stock dividend, recapitalization, reorganization or any similar
transaction which has the effect or increasing or reducing the number
of outstanding shares of stock.

(4) After the Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination:

(A) there shall have been no failure to declare and pay at
the regular date therefor any full periodic dividends, whether or
not cumulative, on any outstanding Preferred Stock of the
Corporation or other Capital Stock

<PAGE>

entitled to a preference over the Common Stock as to dividends
or upon liquidation;

(B) there shall have been no reduction in the annual rate
of dividends paid on the Common Stock, except as necessary to
reflect any subdivision of the Common Stock, and no failure to
increase the annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or other similar transaction
which has the effect of reducing the number of outstanding shares
of Common Stock; and

(C) the Interested Stockholder did not become the
Beneficial Owner of any additional shares of stock of the
Corporation except as part of the transaction that resulted in
such Interested Stockholder becoming an Interested Stockholder or
by virtue of proportionate stock splits or stock dividends.

The provisions of clauses (A) and (B) immediately preceding shall not
apply if no Interested Stockholder or any Affiliate or Associate
thereof voted as a director of the Corporation in favor of foregoing
or reducing dividends in the manner specified in such clauses and the
Interested Stockholder, within ten days after any such act or failure
to act that resulted in such loss or diminution of dividends, notifies
the Board of Directors of the Corporation in writing that the
Interested Stockholder disapproves thereof and requests in good faith
that the Board of Directors rectify such act or failure to act.

(5) After the Interested Stockholder has become an Interested
Stockholder, the Interested Stockholder shall not have received the
benefit, directly or indirectly, except proportionately as a
stockholder, of any loans, advances, guarantees, pledges or other
financial assistance provided by the Corporation or any Subsidiary,
whether in anticipation of or in connection with such Business
Combination or otherwise.

3. DETERMINATIONS. For the purpose of this Article VIII, so long as
Continuing Directors constitute at least a majority of the entire Board of
Directors, the Board of Directors shall have the power to make a good faith
determination, on the basis of information known to them, of: (a) the number of
shares of Capital Stock of which any person or entity is the Beneficial Owner,
(b) whether any person or entity is an Interested Stockholder or an Affiliate or
Associate thereof, (c) whether any person or entity has an agreement,
arrangement or understanding with another as to the matters referred to in the
definition of Beneficial Owner herein, (d) whether any transaction constitutes a
Business Combination (including the power to determine in good faith the book
value or market value of the assets of the Corporation or any Subsidiary) or is
a transaction with or for the benefit of an Interested Stockholder, (e) whether
any of the events referred to in paragraph (b)(4) of Article VIII, section 2,
have occurred, and (f) such other matters with respect to which a determination
is required under this Article VIII. All such good faith determinations by the
Board of Directors shall

<PAGE>

be conclusive and binding on the Corporation and its stockholders for all
purposes of this Article VIII.

ARTICLE IX
LIMITATION OF LIABILITY AND INDEMNIFICATION

1. LIMITATION OF LIABILITY. No director shall be personally liable to
the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, except (a) for breach of the director's duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not in
good faith or that involve intentional misconduct of a knowing violation of law,
(c) pursuant to Section 174 of the DGCL, or (d) for any transaction from which
such director derived an improper personal benefit.

2. AUTHORIZATION OF FURTHER ACTIONS. The Board of Directors may (a)
cause the Corporation to enter into contracts with directors providing for the
limitation of liability set forth in this Article IX to the fullest extent
permitted by law, (b) adopt Bylaws or resolutions, or cause the Corporation to
enter into contracts, providing for indemnification of directors and officers of
the Corporation and other persons (including without limitation directors and
officers of the Corporation's direct and indirect subsidiaries) to the fullest
extent permitted by law, and (c) cause the Corporation to exercise the powers
set forth in Section 145(g) of the DGCL, notwithstanding that some or all of the
members of the Board of Directors acting with respect to the foregoing may be
parties to such contracts or beneficiaries thereof.

3. SUBSIDIARIES. The Board of Directors may cause the Corporation to
approve for its direct and indirect subsidiaries limitation of liability and
indemnification provisions comparable to the foregoing.

4. AMENDMENTS. Any amendment or repeal of this Article IX shall not
adversely affect any elimination or limitation of liability of a director of the
Corporation under this Article IX with respect to any action or inaction
occurring prior to the time of such amendment or repeal. No amendment or repeal
of any Bylaw or resolution relating to indemnification shall adversely affect
any person's entitlement to indemnification whose claim thereto results from
conduct occurring prior to the date of such amendment or repeal.

ARTICLE X
AMENDMENTS; DEFINITIONS

1. AMENDMENTS TO CERTIFICATE OF INCORPORATION. Articles VII, VIII, IX
and X of this Certificate of Incorporation shall not be amended in any manner
(whether by modification or repeal of an existing Article or Articles or by
addition of a new Article or Articles), except upon resolutions adopted by the
affirmative vote of holders of not less than 80% of the Voting Stock, voting
together as a single class; provided, however, that if such resolutions shall
first be adopted by both a majority of the directors then in office and a
majority of the Continuing Directors, voting as a separate group, then such
resolutions shall be deemed adopted by the stockholders upon the affirmative
vote of holders of not less than a majority of the Voting Stock, voting as a
single class.

<PAGE>

2. AMENDMENTS TO BYLAWS. The Corporation's Bylaws may be altered,
amended or repealed, or new Bylaws may be adopted by:

(a) the stockholders, but only upon the affirmative vote of holders
of not less than 80% of the Voting Stock, voting together as a single
class; or

(b) the Board of Directors, but only upon the affirmative vote of
both (i) a majority of the directors then in office and (ii) a majority of
the Continuing Directors, voting as a separate group.

3. DEFINITIONS. For purposes of this Certificate of Incorporation:

(a) "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act (the term "registrant" in such Rule
12b-2 meaning in this case the Corporation); provided, however, that in no
event shall the Corporation, any of its Subsidiaries, any Employee Benefit
Plan or any of the other persons or entities exempted from the definition
of Interested Stockholder in this Article X, section 3, be deemed to be an
Affiliate or Associate of any Interested Stockholder.

(b) "Announcement Date" means the first general public announcement
of the proposal or intention to make a proposal to consummate a Business
Combination or its first communication generally to stockholders of the
Corporation, whichever is earlier.

(c) A person shall be deemed to be the "Beneficial Owner" of and be
deemed to "Beneficially Own" any shares of capital stock (regardless
whether owned of record):

(1) Which that person or any of its Affiliates or Associates,
directly or indirectly, owns beneficially; or

(2) Which such person or any of its Affiliates or Associates has
(A) the right to acquire (whether exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding; or

(3) Which are beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
voting capital stock of the Corporation or any Subsidiaries.

(d) "Business Combination" means any transaction referred to in any
one or more of the clauses (a) through (g) of Article VII, section 1.

<PAGE>

(e) "Capital Stock" means any Common Stock, Preferred Stock or other
shares of capital stock of the Corporation.

(f) "Continuing Director" means (i) any member of the Board of
Directors who is not an Interested Stockholder or an Affiliate or Associate
thereof, and who was a director of the Corporation prior to the time the
Interested Stockholder became an Interested Stockholder, and (ii) any other
member of the Board of Directors who is not an Interested Stockholder or an
Affiliate or Associate thereof, and was recommended or elected by a
majority of the Continuing Directors at a meeting at which a quorum
consisting of a majority of the Continuing Directors was present, provided
that, in the absence of an Interested Stockholder, any reference to
"Continuing Directors" shall mean all the directors then in office.

(g) "Determination Date" means the date on which an Interested
Stockholder first became an Interested Stockholder.

(h) "Employee Benefit Plan" means any option, bonus, profit sharing,
employee stock ownership, dividend reinvestment, savings or similar plan of
the Corporation or any Subsidiary, or any trust related thereto.

(i) "Equity Security" means (1) any stock or similar security,
certificate of interest, or participation in any profit-sharing agreement,
voting trust certificate, or certificate of deposit for the foregoing, (2)
any security convertible, with or without consideration, into an equity
security, or any warrant or other security carrying any right to subscribe
to or purchase an equity security, or (3) any put, call, straddle, or other
option, right or privilege to acquire an equity security from or to sell an
equity security to another without being bound to do so.

(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(k) "Interested Stockholder" means any person (other than the
Corporation, any Subsidiary, any Employee Benefit Plan, any fiduciary with
respect to an Employee Benefit Plan acting in such capacity, any person
owning Capital Stock as of the date of filing this Certificate of
Incorporation, or any Affiliate or Associate of any of the foregoing) who
(1) is the Beneficial Owner, directly or indirectly, of shares of Capital
Stock (including two or more classes or series voting together as a single
class) representing 15% or more of the Voting Stock or (2) is an Affiliate
or Associate of the Corporation and at any time within the two-year period
immediately prior to the date in question was the Beneficial Owner,
directly or indirectly, of shares of Capital Stock (including two or more
classes or series voting together as a single class) representing 15% or
more of the Voting Stock. For the purpose of determining whether a person
is an Interested Stockholder, the number of shares of Voting Stock deemed
to be outstanding shall include shares deemed owned by the person through
application of paragraph (c) of Article IX, section 3 but shall not include
any other shares of Voting Stock that may be issuable pursuant to any
agreement, arrangement, or understanding or upon exercise of conversion
rights, warrants or options, or otherwise.

<PAGE>

(l) "Market Value" means:

(1) in the case of stock, the highest closing sale price during
the 30 calendar day period immediately preceding the date in question
of a share of such stock on the New York Stock Exchange, or, if such
stock is not listed on the New York Stock Exchange, then on any
national securities exchange on which the Common Stock is listed, or
if neither listed on a national securities exchange nor quoted on the
Nasdaq National Market, the highest closing sales price during the 30
calendar day period immediately preceding the date in question, the
closing bid quotation with respect to a share of such stock during the
30 calendar day period preceding the date in question as quoted by
Nasdaq or another generally recognized reporting system, or if no such
quotation is available, the fair market value on the date in question
of a share of such stock as determined by a majority of the Continuing
Directors at a meeting of the Board of Directors at which a quorum
consisting of at least a majority of the then Continuing Directors is
present; and

(2) in the case of property other than cash or stock, the fair
market value or such property on the date in question as determined by
a majority of the Continuing Directors at a meeting of the Board of
Directors at which a quorum consisting of at least a majority of the
then Continuing Directors is present.

(m) A "person" means any individual, firm, corporation or other
entity, or a group of persons acting or agreeing to act together in the
manner set forth in Rule 13d-5 under the Exchange Act.

(n) "Subsidiary" means any corporation, partnership or other entity
of which the Corporation, directly or indirectly, owns voting stock or
similar interests having a majority of the votes entitled to be cast.

(o) "Valuation Date" means:

(1) for a Business Combination voted upon by stockholders, the
later of the day prior to the date of the stockholders' vote or the
date 20 business days prior to the consummation of the Business
Combination; and

(2) for a Business Combination not voted upon by stockholders,
the date of the consummation of the Business Combination.

(p) "Voting Stock" means the outstanding shares of Capital Stock
entitled to vote generally in an election of directors.

----------------------------------

<PAGE>

FREEPORT-MCMORAN SULPHUR INC.

BY-LAWS
AS AMENDED

SECTION 1
OFFICES

1.1 REGISTERED OFFICE. The registered office of Freeport-McMoRan
Sulphur Inc. (the "Corporation") shall be in the City of Wilmington, County
of New Castle, State of Delaware.

1.2 OTHER OFFICES. The Corporation may also have offices at such other
places both within and without the State of Delaware as the Corporation's
Board of Directors may from time to time determine or the business of the
Corporation may require.

SECTION 2
MEETINGS OF STOCKHOLDERS

2.1 ANNUAL MEETINGS. Annual meetings of stockholders shall be held for
the election of directors at such date, time and place either within or
without the State of Delaware as shall be designated by the Board of
Directors and stated in the notice of the meeting.

2.2 SPECIAL MEETINGS. Subject to any rights of the holders of shares
of Preferred Stock to call special meetings of stockholders, special meetings
of the stockholders for any purpose or purposes may be called only by the
Chairman or either Co-Chairman of the Board of Directors, the Corporation's
President or upon a vote of the majority of the Board of Directors, at such
date, time and place either within or without the State of Delaware as shall
be stated in the notice of the meeting.

2.3 NOTICE OF STOCKHOLDER NOMINATIONS AND STOCKHOLDER BUSINESS. (a)
At any meeting of stockholders, only such business shall be conducted as is
properly before the meeting. No business shall be deemed to have been
properly brought before a special meeting of stockholders unless (i) the
matter is submitted by the person or persons calling the special meeting and
(ii) the matter is contained in the notice of the meeting. Except as
otherwise provided in the Certificate of Incorporation or required by
applicable law, nominations for the election of directors at a meeting at
which directors are to be elected or other matters to be properly brought
before any annual meeting of stockholders must be (i) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the
Board of Directors, including matters covered by Rule 14a-8 of the Securities
and Exchange Commission, (ii) otherwise properly brought before the meeting
by or at the direction of the Board of Directors, or (iii) otherwise properly
brought before the meeting by any person who (A) has been for at least one
year the Beneficial Owner of at least 1% of any class or series of
outstanding Voting Stock entitled to be voted on the proposed business and
(B) complies with the procedures set forth below.

<PAGE>

(b) A notice of the intent of a stockholder to make a nomination or
to bring any other matter before the meeting shall be made in writing and
received by the Corporation's Secretary not more than 270 days and not less
than 60 days in advance of the first anniversary of the preceding year's
annual meeting of stockholders or, in the case of an annual meeting of
stockholders scheduled to be held either 30 days earlier or later than such
anniversary date, such notice shall be received by the Corporation's
Secretary within 15 days of the earlier of the date on which notice of such
meeting is first mailed to stockholders or public disclosure of the meeting
date is made.

(i) the name, age, business address and residential address
of (A) the stockholder who intends to make a nomination or bring up any
other matter, and (B) any person acting in concert with such
stockholder;

(ii) the number of shares of Voting Stock of which the
stockholder is the Beneficial Owner and the dates on which such person
acquired his or her Voting Stock;

(iii) a representation that the stockholder intends to appear
in person at the meeting to make the nomination or bring up the matter
specified in the notice;

(iv) with respect to notice of an intent to make a
nomination, a description of all agreements, arrangements or
understandings among the stockholder, any person acting in concert with
the stockholder, each proposed nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder;

(v) with respect to notice of an intent to make a
nomination, (A) the name, age, business address and residential address
of each person proposed for nomination, (B) the principal occupation or
employment of such person, (C) the class and number of shares of
capital stock of the Corporation of which such person is the beneficial
owner, and (D) any other information relating to such person that would
be required to be disclosed in a proxy statement filed pursuant to the
proxy rules of the Securities and Exchange Commission had such nominee
been nominated by the Board of Directors; and

(vi) with respect to notice of an intent to bring up any
other matter, a complete and accurate description of the matter not to
exceed 500 words, the reasons for conducting such business at the
meeting, and any material interest of the stockholder in the matter.

(d) The Corporation's Secretary may require any stockholder
submitting a notice of an intent to make a nomination or bring up other
business to furnish such documentary information as may be reasonably
required by the Corporation to determine that such stockholder has been for
at least one year the Beneficial Owner of at least 1% of any class or series
of outstanding Voting Stock entitled to be voted on the proposed business.

2
<PAGE>

(e) Notice of an intent to make a nomination shall be accompanied
by the written consent of each nominee to serve as a director of the
Corporation if so elected and an affidavit of each such nominee certifying
that he or she meets the qualifications necessary to serve as a director of
the Corporation. The Corporation may require any proposed nominee to furnish
such other information as may be reasonably required by the Corporation to
determine the eligibility and qualifications of such person to serve as a
director.

(f) With respect to any proposal by a stockholder to bring before
a meeting any matter other than the nomination of directors, the following
shall govern:

(i) If the Corporation's Secretary has received sufficient
notice of a proposal that may properly be brought before the meeting, a
proposal sufficient notice of which is subsequently received by the
Secretary and that is substantively duplicative of the first proposal
shall not be deemed properly brought before the meeting. If in the
judgment of the Board of Directors a proposal deals with substantially
the same subject matter as a prior proposal submitted to stockholders
at a meeting held within the preceding five years, it shall not be
properly brought before any meeting held within three years after the
latest such previous submission if (A) the proposal was submitted at
only one meeting during such preceding period and it received
affirmative votes representing less than 3% of the total number of
votes cast in regard thereto, (B) the proposal was submitted at only
two meetings during such preceding period and it received at the time
of its second submission affirmative votes representing less than 6% of
the total number of votes cast in regard thereto, or (C) the proposal
was submitted at three or more meetings during such preceding period
and it received at the time of its latest submission affirmative votes
representing less than 10% of the total number of votes cast in regard
thereto.

(ii) Notwithstanding compliance with all of the procedures
set forth above in this Section, no proposal shall be deemed to be
properly brought before a meeting of stockholders if, in the judgment
of the Board of Directors, it is not a proper subject for action by
stockholders under Delaware Law.

(g) At the meeting of stockholders, the chairman shall declare out
of order and disregard any nomination or other matter that is not presented
in accordance with the foregoing procedures or that is otherwise contrary to
the foregoing terms and conditions.

(h) Nothing in this Section shall be deemed to affect any rights
of stockholders to request inclusion of proposals in the Corporation's proxy
statement or to solicit their own proxies pursuant to the proxy rules of the
Securities and Exchange Commission.

2.4 NOTICE OF MEETING. Whenever stockholders are required or permitted
to take any action at a meeting, a written notice of the meeting shall be
given which shall state the place, date and time of the meeting, and the
purpose or purposes for which the meeting is called. Unless otherwise
provided by law, the written notice of any meeting shall be given to each
stockholder entitled to vote at such meeting not less than 10 nor more than
60 days before the date of the meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States

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mail, postage prepaid, directed to the stockholder at such stockholder's
address as it appears on the records of the Corporation.

2.5 STOCKHOLDER LIST. The Secretary shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to
the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.

2.6 QUORUM. Except as otherwise provided by law, the Certificate of
Incorporation or these By-laws, with respect to each matter considered and
voted upon at any stockholders' meeting, the holders of a majority of the
outstanding shares of each class of Capital Stock, or series thereof,
entitled to vote thereon, present in person or represented by proxy, shall
constitute a quorum, provided that two or more classes or series shall be
considered a single class if the holders thereof are entitled to vote
together as a single class with respect to such matter. If, however, a
quorum shall not be present or represented at any meeting of the stockholders
(or with respect to any matter to be considered and voted upon thereat), the
holders of any class of Capital Stock or series thereof entitled to vote
thereat (or with respect to any such matter), present in person or
represented by proxy, shall have the power to adjourn the meeting (or the
vote upon such matter, without prejudice to the right of the stockholders to
vote upon any matter as to which a quorum does exist) from time to time,
without notice other than announcement at the meeting, until a quorum shall
be presented or represented. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted that might
have been transacted at the meeting as originally notified. If the
adjournment is for more than 30 days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting (or with respect to such matter).

2.7 VOTE REQUIRED. When a quorum is present with respect to any matter
considered at any meeting of stockholders, the vote of the holders of a
majority of the Voting Stock shall decide such matter, unless the matter is
one upon which by express provision of law, the Certificate of Incorporation
or these By-laws, a different vote is required, in which case such express
provision shall govern and control the decision of such matter.

2.8 VOTING RIGHTS OF STOCKHOLDERS. Unless otherwise provided in the
Certificate of Incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of
Voting Stock held of record by such holder. If the Certificate of
Incorporation provides for more or less than one vote for any share of Voting
Stock on any matter, every reference in these By-laws to a majority or other
proportion of Voting Stock shall refer to such majority or other proportion
of the total votes accorded such shares of stock.

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2.9 PROXIES. (a) Each stockholder entitled to vote at a meeting of
stockholders may authorize another person or persons to act for such
stockholder by proxy, but no such proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer period.

(b) Execution of a proxy may be accomplished by a stockholder or
his or her authorized officer, director, employee or agent signing such
writing or causing his or her signature to be affixed to such writing by any
reasonable means including, without limitation, by facsimile signature. A
stockholder may authorize another person or persons to act for him as proxy
by transmitting or authorizing the transmission of a telegram, cablegram, or
other means of electronic transmission to the person who will be the holder
of the proxy or to a proxy solicitation firm, proxy support service
organization or like agent duly authorized by the person who will be the
holder of the proxy to receive such transmission, provided that any such
telegram, cablegram or other means of electronic transmission must either set
forth or be submitted with information from which it can be determined that
the telegram, cablegram or other electronic transmission was authorized by
the stockholder. If it is determined that such telegrams, cablegrams or
other electronic transmissions are valid, the inspectors shall specify the
information upon which they relied.

(c) Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission may be substituted or used in
lieu of the original writing or transmission for any and all purposes for
which the original writing or transmission could be used, provided that such
copy, facsimile telecommunication or other reproduction shall be a complete
reproduction of the entire original writing or transmission.

(d) A duly executed proxy shall be irrevocable if it states that
it is irrevocable and if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A stockholder may revoke
any proxy that is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or another
duly executed proxy bearing a later date with the Secretary.

2.10 NO UNANIMOUS WRITTEN CONSENT. Unless otherwise provided in the
Certificate of Incorporation, any action required or permitted to be taken by
the stockholders must be effected at a duly called annual or special meeting
of stockholders, and may not be effected by any written consent of such
holders.

2.11 TREASURY STOCK. Shares of Capital Stock held in the treasury of
the Corporation shall not be deemed to be outstanding shares for the purpose
of voting or determining the presence of a quorum or the total number of
shares entitled to vote on any matter.

2.12 PRESIDING OFFICER. All meetings of stockholders shall be presided
over by the Chairman or either Co-Chairman of the Board of Directors, or in
his absence, by a chairman designated by the Board of Directors. The
Secretary shall act as secretary of the meeting, or in the absence of the
Secretary by an Assistant Secretary, or in their absence the chairman of the
meeting may appoint any person to act as secretary of the meeting.

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2.13 INSPECTORS. Prior to a meeting of stockholders, the Board shall
appoint one or more inspectors to act at the meeting and make a written
report thereof. Each inspector shall take and sign an oath faithfully to
execute the duties of with strict impartiality and according to the best of
his or her ability. The inspectors shall (i) ascertain the number of shares
outstanding and the voting power of each, (ii) determine the shares
represented at a meeting and the validity of the proxies and ballots, (iii)
count all votes and ballots, (iv) determine and retain for a reasonable
period a record of the disposition of any challenges made to any
determination by the inspectors, (v) certify their determination of the
number of shares represented at the meeting, and their count of all votes and
ballots, and (vi) perform such other functions as the presiding officer of
the meeting shall determine. The inspectors may appoint or retain other
persons or entities to assist them in the performance of their duties.

2.14 ADJOURNMENTS. Any annual or special meeting of stockholders may be
adjourned by the presiding officer from time to time to reconvene at the same
or some other place, and notice need not be given of any such adjourned
meeting if the time and place thereof are announced at the meeting at which
the adjournment is taken. At the adjourned meeting the Corporation may
transact any business which might have been transacted at the original
meeting. If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, notice of
the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.

SECTION 3
DIRECTORS

3.1 POWERS. The business and affairs of the Corporation shall be
managed under the direction of a Board of Directors (the "Board"), except as
otherwise provided by law or by the Certificate of Incorporation.

3.2 NUMBER. Subject to the restriction that the number of directors
shall not be less than the number required by Delaware Law, and subject
further to the creation or lapse of directorships upon the occurrence of
events specified in the Certificate of Incorporation, the number of directors
shall be fixed, from time to time, by a resolution adopted by a majority of
the Continuing Directors. Until otherwise fixed by the directors, the number
of directors constituting the entire Board shall be one. The Secretary shall
have the power to certify at any time as to the number of directors
authorized and as to the class to which each director has been elected or
assigned.

3.3 CLASSIFICATION OF BOARD. The members of the Board, other than
those who may be elected by holders of any one or more series of Preferred
Stock voting separately, shall be classified, with respect to the time during
which they hold office, into three classes, designated Class I, II and III,
as nearly equal in number as possible. The initial directors in Class I
shall be elected for a term expiring at the annual meeting of stockholders to
be held in 1998, the initial directors in Class II shall be elected for a
term expiring at the annual meeting of stockholders to be held in 1999 and
the initial directors in Class III shall be elected for a term expiring at
the annual meeting of stockholders to be held in 2000.

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3.4 RESIGNATION. Any director may resign at any time upon written
notice to the Board, the President or the Secretary. Such resignation shall
take effect at the time specified therein, and unless otherwise specified
therein no acceptance of such resignation shall be necessary to make it
effective.

3.5 NOMINATIONS. Only persons who are nominated in accordance with the
procedures set forth in Section 2.3 shall be eligible for election as
directors. Notwithstanding any provision of these By-laws to the contrary,
the provisions of Section 2.3 shall not apply to the election of any
directors which the holders of any class or series of Preferred Stock, voting
separately as a class, may be entitled to elect.

3.6 ELECTION OF DIRECTORS. Unless otherwise provided in the
Certificate of Incorporation, at each meeting of the stockholders for the
election of directors at which a quorum is present, directors shall be
elected by a plurality of the votes cast with respect to shares of Voting
Stock present in person or represented by proxy at the meeting.

3.7 COMPENSATION. Unless otherwise restricted by the Certificate of
Incorporation or of these By-laws, the Board shall have the authority to fix
the compensation of directors. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board. The directors may be paid a
stated salary as director or a fixed sum for attendance at each meeting of
the Board or committee. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor.

SECTION 4
MEETINGS OF THE BOARD

4.1 MEETINGS. The Board may hold meetings, both regular and special,
either within or without the State of Delaware.

4.2 REGULAR MEETINGS. Regular meetings of the Board may be held
without notice at such time and at such place as shall from time to time be
determined by the Board.

4.3 SPECIAL MEETINGS. Special meetings of the Board may be called by
the Chairman or either Co-Chairman of the Board or the President on at least
24 hours' notice to each director, either personally or by mail, telephone or
telegram. Special meetings shall be called by the Chairman or either
Co-Chairman of the Board or the President in like manner and on like notice
on the written request of any director. Any notice to call a special meeting
pursuant to this section may be executed by the Secretary of the Company
acting on behalf of the person calling the meeting.

4.4 QUORUM. At all meetings of the Board a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board, except as may be otherwise specifically
provided by law or by the Certificate of Incorporation. If a quorum shall
not be present at any meeting of the Board, the directors present thereat may
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present.

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4.5 ACTION AT MEETING. If a quorum is present when any meeting of the
Board is convened, the directors may continue to do business, taking action
by vote of a majority of a quorum as fixed in Section 4.4, until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a
quorum or the refusal of any director present to vote.

4.6 ACTION BY CONSENT. Unless otherwise restricted by the Certificate
of Incorporation or these By-laws, any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may
be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee.

4.7 MEETINGS BY TELEPHONE. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, members of the Board or any
committee designated by the Board may participate in a meeting of the Board
or any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.

4.8 PRESIDING OFFICER. The Chairman or either Co-Chairman of the Board
shall preside at all meetings of the Board or, in his absence, a chairman
appointed by the Board. The Secretary or in the absence of the Secretary, an
Assistant Secretary, shall act as secretary of each meeting, but in the
absence of the Secretary and an Assistant Secretary, the chairman of the
meeting may appoint any person to act as secretary of the meeting.

SECTION 5
COMMITTEES OF THE BOARD

5.1 DESIGNATION OF COMMITTEES. The Board may, by resolution passed by
a majority of the Continuing Directors, designate one or more committees,
each committee to consist of one or more of the directors of the Corporation.
Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board. The Board
may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the Board to act at the meeting in the place of any
such absent or disqualified member.

5.2 AUTHORITY OF COMMITTEES. Any committee designated by the Board
shall have those powers and authority of the Board in the management of the
business and affairs of the Corporation provided in the resolution of the
Board designating such committee, provided that no such committee shall have
the power or authority to (a) approve, adopt or recommend to the stockholders
any action or matter expressly required by Delaware Law to be submitted to
stockholders for approval, or (b) adopt, amend or repeal any Bylaw of the
Corporation.

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5.3 MINUTES. Each committee shall keep regular minutes of its meetings
and report the same to the Board when required.

SECTION 6
NOTICES

6.1 FORM OF NOTICE. Unless provided otherwise by law, the Certificate
of Incorporation or these By-laws, any notice that is required to be given to
stockholders shall be given in writing, by mail, addressed to such
stockholder, at his address as it appears on the records of the Corporation,
with postage thereon prepaid, and such notice shall be deemed to be given at
the time when the same shall be deposited in the United States mail. Notice
to directors may be given in like manner or may be given by telephone, telex
or facsimile transmission or by sending the same by national commercial
courier service for next-day delivery.

6.2 WAIVER. Whenever any notice is required to be given under law, the
Certificate of Incorporation or these By-laws, a waiver thereof in writing,
signed by the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
Attendance of a person at a meeting shall constitute a waiver of notice of
such meeting, except when the person attends a meeting for the express
purpose of objecting at the beginning of the meeting, to the transaction of
any business because the meeting is not lawfully called or convened.

SECTION 7
OFFICERS

7.1 GENERAL. The officers of the Corporation shall be chosen by the
Board at its first meeting after each annual meeting of stockholders and
shall be a President, a Secretary and a Treasurer. The Board may also choose
a Chairman or Co-Chairmen of the Board and a Vice Chairman of the Board from
among the directors and may choose a General Counsel, a Controller and one or
more Executive Vice Presidents, Senior Vice Presidents, Vice Presidents,
Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers.
Any number of offices may be held by the same person, unless the Certificate
of Incorporation or the By-laws otherwise provide.

7.2 OTHER OFFICERS. The Board may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board.

7.3 COMPENSATION. The salaries of all officers and agents of the
Corporation shall be fixed by the Board.

7.4 TERM. The officers of the Corporation shall hold office until
their successors are chosen and qualify. Subject to such obligations of the
Corporation as may exist under any contract of employment, any officer
elected or appointed by the Board may be removed at any time by the President
or by the affirmative vote of a majority of the Continuing Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the
Board.

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7.5 CHAIRMAN OR CO-CHAIRMEN OF THE BOARD. The Chairman or Co-Chairmen
of the Board shall have the general powers, duties and responsibilities of
supervision and management inherent in such office as well as such additional
powers and duties as the Board may from time to time prescribe. He or they
shall control and direct the Corporation's business and supervise, direct and
control the management of the business of the Corporation. He or either one
of them shall preside at all meetings of the stockholders and the Board.

7.6 VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board shall
have such powers and duties as may be delegated to him by the Board of
Directors or the Co-Chairmen of the Board.

7.7 PRESIDENT. The President shall be the Chief Executive Officer of
the Corporation. The President shall, except as the Board may otherwise
direct, supervise the daily operations of the business of the Corporation and
have general charge of and authority over the Corporation's property and
supervision over the Corporation's officers, employees and agents. At the
request of the Chairman or either Co-Chairman of the Board, or in his absence
or during his disability, the President shall perform the duties and exercise
the functions of the Chairman of the Board. Except as the Board may
otherwise authorize, the President shall execute bonds, mortgages and any
other contracts of any nature on behalf of the Corporation.

7.8 EXECUTIVE VICE PRESIDENTS, SENIOR VICE PRESIDENTS, ASSISTANT VICE
PRESIDENTS, CONTROLLER AND GENERAL COUNSEL. The Executive Vice Presidents,
Senior Vice Presidents, Assistant Vice Presidents, Controller and General
Counsel shall have such powers and duties as may be delegated to them by the
Board of Directors or the Co-Chairmen of the Board.

7.9 VICE PRESIDENTS. In the absence of the President or in the event
of his inability or refusal to act, the Vice President (or in the event there
be more than one Vice President, the Vice Presidents in the order designated
by the Board, or in the absence of any designation, then in the order of
their election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions
upon the President. The Vice Presidents shall perform such other duties and
have such other powers as the Board, the Chairman or either Co-Chairman of
the Board, or the President may from time to time prescribe.

7.10 SECRETARY. The Secretary shall attend all meetings of the Board
and all meetings of the stockholders and record all the proceedings of the
meetings of the Corporation and of the Board in a book to be kept for that
purpose and shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board, and shall perform such other
duties as may be prescribed by the Board or President, under whose
supervision he shall be. He shall have custody of the corporate seal of the
Corporation and he, or an Assistant Secretary, shall have authority to affix
the same to any instrument requiring it and when so affixed, it may be
attested by his signature or by the signature of such Assistant Secretary.
The Board may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his signature.

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7.11 ASSISTANT SECRETARY. The Assistant Secretary, or if there be more
than one, the Assistant Secretaries in the order determined by the Board (or
if there be no such determination, then in the order of their election)
shall, in the absence of the Secretary or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Secretary
and shall perform such other duties and have such other powers as the Board
may from time to time prescribe.

7.12 TREASURER. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts
and disbursements in books belonging to the Corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
Corporation in such depositories as may be designated by the Board. He shall
disburse the funds of the Corporation as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the President and
the Board, at its regular meetings, or when the Board so requires, an account
of all his transactions as treasurer and of the financial condition of the
Corporation. If required by the Board, he shall give the Corporation a bond
(which shall be renewed every six years) in such sum and with such surety or
sureties as shall be satisfactory to the Board for the faithful performance
of the duties of his office and for the restoration to the Corporation, in
case of his death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the Corporation.

7.13 ASSISTANT TREASURER. The Assistant Treasurer, or if there shall be
more than one, the Assistant Treasurers in the order determined by the Board
(or if there be no such determination, then in the order of their election)
shall, in the absence of the Treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board
may from time to time prescribe.

SECTION 8
STOCK

8.1 CERTIFICATED OR UNCERTIFICATED. The shares of the Corporation
shall be uncertificated or shall be represented by certificates signed in the
name of the Corporation by the Chairman or either Co-Chairman of the Board or
the President or a Vice President and by the Secretary or an Assistant
Secretary of the Corporation. Upon the face or back of each stock
certificate issued to represent any partly paid shares, or upon the books and
records of the Corporation in the case of uncertificated partly paid shares,
shall be set forth the total amount of the consideration to be paid therefor
and the amount paid thereon shall be stated.

8.2 SUMMARY OF RIGHTS. The powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series of each class of stock, and of each series of any class, and
the qualifications, limitations or restrictions of such preferences and
rights shall be set forth in full or summarized on the face or back of the
certificate that the Corporation shall issue to represent such class or
series of stock; provided that, except as otherwise provided in Section 202
of Delaware Law, or in any act amending, supplementing or substituted for
such section, in lieu of the foregoing requirements, there may be set forth
on the face or back of the certificate which the Corporation shall issue to
represent such class or series of stock, a statement that the

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Corporation will furnish without charge to each stockholder who so requests
the powers, designations, preferences and relative, participating, optional
or other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and rights.

8.3 NOTICE TO HOLDERS OF UNCERTIFICATED STOCK. Within a reasonable
time after the issuance or transfer of uncertificated stock, the Corporation
shall send, or cause to be sent, to the registered owner thereof a written
notice containing the information required to be set forth or stated on
certificates pursuant to Sections 151, 156, 202(a) or 218(a) of Delaware Law
or a statement that the Corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions
of such preferences and rights.

8.4 FACSIMILE SIGNATURES. Any of or all the signatures on a
certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer, transfer agent or registrar at
the date of issue.

8.5 LOST CERTIFICATES. The Board may direct a new certificate or
certificates or uncertificated shares to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates
or uncertificated shares, the Board may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or give the
Corporation a bond in such sum as it may direct as indemnity against any
claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.

8.6 TRANSFER OF STOCK. Upon surrender to the Corporation or the
transfer agent of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall
be the duty of the Corporation to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon
its books. Upon receipt of proper transfer instructions from the registered
owner of uncertificated shares such uncertificated shares shall be cancelled
and issuance of new equivalent uncertificated shares or certificated shares
shall be made to the person entitled thereto and the transaction shall be
recorded upon the books of the Corporation.

8.7 REGISTERED STOCKHOLDERS. Except as otherwise provided by law, the
Corporation, and its directors, officers and agents, may recognize and treat
a person registered on its records as the owner of shares, as the owner in
fact thereof for all purposes, and as the person exclusively entitled to have
and to exercise all rights and privileges incident to the ownership of such
shares, and rights

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under this Section 8.7 shall not be affected by any actual or constructive
notice that the Corporation, or any of its directors, officers or agents, may
have to the contrary.

SECTION 9
INDEMNIFICATION

9.1 INDEMNITY. (a) Except with respect to an action or Claim (other
than as authorized in Section 9.2) commenced by an Indemnitee against the
Corporation or by an Indemnitee as a derivative action by or in the right of
the Corporation that has not been authorized by the Board, the Corporation
shall indemnify, defend and hold harmless any Indemnitee against Expenses
reasonably incurred or suffered in connection with any Claim against
Indemnitee, whether the basis of such Claim is alleged action or inaction in
an official capacity as Indemnitee or in any other capacity while serving as
an Indemnitee (including appearances as a witness or in connection with
giving testimony or evidence), if:

(i) the Indemnitee is successful in his defense of the Claim on
the merits or otherwise, or

(ii) the Indemnitee has been found by the Determining Body to have
met the Standard of Conduct (as determined in accordance with the
procedures set forth in this Section 9.1), provided that no
indemnification shall be made in respect of any Claim by or in the
right of the Corporation as to which Indemnitee shall have been
adjudicated in a final judgment to be liable to the Corporation,
unless, and only to the extent that the court in which such Claim was
brought shall determine upon application that, despite such
adjudication of liability but in view of all the circumstances of the
case, Indemnitee is fairly and reasonably entitled to indemnity for
such Expenses which the court shall deem proper.

(b) For purposes of this Section 9, the "Standard of Conduct" is
met when conduct by an Indemnitee with respect to which a Claim is asserted
was conduct performed in good faith which he reasonably believed to be in, or
not opposed to, the best interest of the Corporation, and, in the case of a
Claim which is a criminal action or proceeding, conduct that the Indemnitee
had no reasonable cause to believe was unlawful. The termination of any
Claim by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
Indemnitee did not meet the Standard of Conduct.

(c) Promptly upon becoming aware of the existence of any Claim as
to which Indemnitee may be indemnified hereunder, Indemnitee shall notify the
Chief Executive Officer of the Corporation, but the failure to promptly
notify the Chief Executive Officer shall not relieve the Corporation from any
obligation under this Section 9. Upon receipt of such request, the Chief
Executive Officer shall promptly advise the members of the Board of the
request and that the establishment of a Determining Body with respect to
Indemnitee's request for indemnification as to the Claim will be presented at
the next regularly scheduled meeting of the Board. If a meeting of the Board
is not regularly scheduled within 120 calendar days of the date the Chief
Executive Officer receives notice of the Claim, the Chief Executive Officer
shall cause a special meeting of the Board of Directors to be called within
such period in accordance with the provisions of the By-laws. After

13
<PAGE>

the Determining Body has been established, the Determining Body shall inform
the Indemnitee of the constitution of the Determining Body and Indemnitee
shall provide the Determining Body with all facts relevant to the Claim known
to such Indemnitee, and deliver to the Determining Body all documents
relevant to the Claim in Indemnitee's possession. Before the 60th day after
its receipt from the Indemnitee of such information (the "Determination
Date"), together with such additional information as the Determining Body may
reasonably request of Indemnitee prior to such date (the receipt of which
shall not begin a new 60-day period) the Determining Body shall determine
whether or not Indemnitee has met the Standard of Conduct and shall advise
Indemnitee of its determination. If Indemnitee shall have supplied the
Determining Body with all relevant information, including all additional
information reasonably requested by the Determining Body, any failure of the
Determining Body to make a determination by or on the Determination Date as
to whether the Standard of Conduct was met shall be deemed to be a
determination that the Standard of Conduct was met by Indemnitee.

(d) If at any time during the 60-day period ending on the
Determination Date, Indemnitee becomes aware of any relevant facts not
theretofore provided by him to the Determining Body, Indemnitee shall inform
the Determining Body of such facts, unless the Determining Body has obtained
such facts from another source. The provision of such facts to the
Determining Body shall not begin a new 60 day period.

(e) The Determining Body shall have no power to revoke a
determination that Indemnitee met the Standard of Conduct unless Indemnitee
(i) submits to the Determining Body at any time during the 60 days prior to
the Determination Date fraudulent information, (ii) fails to comply with the
provisions of Section 9.1(d), or (iii) intentionally fails to submit
information or documents relevant to the Claim reasonably requested by the
Determining Body prior to the Determination Date.

(f) In the case of any Claim not involving any threatened or
pending criminal proceeding:

(i) if prior to the Determination Date the Determining Body has
affirmatively made a determination that Indemnitee met the Standard of
Conduct (not including a determination deemed to have been made by
inaction), the Corporation may, in its sole discretion, after notice to
Indemnitee, assume all responsibility for the defense of the Claim with
counsel satisfactory to Indemnitee (who shall not, except with the
written consent of Indemnitee, be counsel to the Corporation), and, in
any event, the Corporation and the Indemnitee each shall keep the other
informed as to the progress of the defense of the Claim, including
prompt disclosure of any proposals for settlement; provided that if the
Corporation is a party to the Claim and Indemnitee reasonably
determines that there is any conflict between the positions of the
Corporation and Indemnitee, with respect to the Claim or otherwise,
then Indemnitee shall be entitled to conduct his defense with counsel
of his choice at the Corporation's expense in accordance with the terms
and conditions of this Section 9; and provided further that Indemnitee
shall in any event be entitled at his expense to employ counsel chosen
by him to participate in the defense of the Claim; and

14
<PAGE>

(ii) The Corporation shall not be obligated to indemnify Indemnitee
for any amount paid in a settlement that the Corporation has not
approved. The Corporation shall fairly consider any proposals by
Indemnitee for settlement of the Claim. If the Corporation proposes a
settlement of the Claim and such settlement is acceptable to the person
asserting the Claim, or the Corporation believes a settlement proposed
by the person asserting the Claim should be accepted, it shall inform
Indemnitee of the terms of such proposed settlement and shall fix a
reasonable date by which Indemnitee shall respond. If Indemnitee
agrees to such terms, he shall execute such documents as shall be
necessary to make final the settlement. If Indemnitee does not agree
with such terms, Indemnitee may proceed with the defense of the Claim
in any manner he chooses, provided that if Indemnitee is not successful
on the merits or otherwise, the Corporation's obligation to indemnify
such Indemnitee as to any Expenses incurred following his disagreement
shall be limited to the lesser of (A) the total Expenses incurred by
Indemnitee following his decision not to agree to such proposed
settlement or (B) the amount that the Corporation would have paid
pursuant to the terms of the proposed settlement.

(g) In the case of any Claim involving a proposed, threatened or
pending criminal proceeding, Indemnitee shall be entitled to conduct the
defense of the Claim with counsel of his choice and to make all decisions
with respect thereto; provided, that the Corporation shall not be obliged to
indemnify Indemnitee for any amount paid in settlement of such a Claim unless
the Corporation has approved such settlement.

(h) After notifying the Corporation of the existence of a Claim in
accordance with Section 9.1(c), Indemnitee may from time to time request the
Corporation to pay the Expenses (other than judgments, fines, penalties or
amounts paid in settlement) that he incurs in pursuing a defense of the Claim
prior to the time that the Determining Body determines whether the Standard
of Conduct has been met. The Disbursing Officer shall pay to Indemnitee the
amount requested (regardless of Indemnitee's ability to repay such amount)
upon receipt of an undertaking by or on behalf of Indemnitee to repay such
amount along with any other amounts advanced or paid after the Determination
Date in accordance with the provisions of this Section 9.1, if (i) the
Determining Body determines prior to the Determination Date that Indemnitee
did not meet the Standard of Conduct or (ii) Indemnitee is prohibited from
being indemnified by the Corporation by virtue of the provisions of Delaware
Law.

(i) After it has been determined that the Standard of Conduct has
been met, for so long as and to the extent that the Corporation is required
to indemnify Indemnitee under this Section 9, the provisions of Section
9.1(h) shall continue to apply with respect to Expenses incurred after such
time except that (i) no undertaking shall be required of Indemnitee and (ii)
the Disbursing Officer shall pay to Indemnitee the amount of any fines,
penalties or judgments against him that have become final and for which he is
entitled to indemnification hereunder, and any amount of indemnification
ordered to be paid to him by a court.

(j) Any determination by the Corporation with respect to settlement
of a Claim shall be made by the Determining Body.

15
<PAGE>

(k) All determinations and judgments made by the Determining Body
hereunder shall be made in good faith.

(l) The Corporation and Indemnitee shall keep confidential to the
extent permitted by law and their fiduciary obligations all facts and
determinations provided pursuant to or arising out of the operation of this
Section 9 and the Corporation and Indemnitee shall instruct its or his agents
and employees to do likewise.

9.2 ENFORCEMENT. (a) The rights provided by this Section 9 shall be
enforceable by Indemnitee in any court of competent jurisdiction.

(b) If Indemnitee seeks a judicial adjudication of his rights
under this Section 9 Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any and all
Expenses actually and reasonably incurred by him in connection with such
proceeding but only if he prevails therein. If it shall be determined that
Indemnitee is entitled to receive part but not all of the relief sought, then
the Indemnitee shall be entitled to be reimbursed for all Expenses incurred
by him in connection with such judicial adjudication if the amount to which
he is determined to be entitled exceeds 50% of the amount of his claim.
Otherwise, the Expenses incurred by Indemnitee in connection with such
judicial adjudication shall be appropriately prorated.

(c) In any judicial proceeding described in this Section 9.2, the
Corporation shall bear the burden of proving that Indemnitee is not entitled
to the relief sought, even if the Determining Body prior to the Determination
Date determined that Indemnitee failed to meet the Standard of Conduct. If
prior to the Determination Date the Determining Body failed to make a
determination that Indemnitee did not meet the Standard of Conduct, it shall
not be a defense to such suit that Indemnitee did not meet the Standard of
Conduct.

9.3 REFORMATION. If any provision of this Section 9 is determined by
a court having jurisdiction over the matter to violate or conflict with
applicable law, the court shall be empowered to modify or reform such
provision so that, as modified or reformed, such provision provides the
maximum indemnification permitted by Delaware Law, and such provision, as so
modified or reformed, and the balance of this Section 9 shall be applied in
accordance with their terms. Without limiting the generality of the
foregoing, if any portion of this Section 9 shall be invalidated on any
ground, the Corporation shall nevertheless indemnify an Indemnitee to the
full extent permitted by any applicable portion of this Section 9 that shall
not have been invalidated and to the full extent permitted by law with
respect to that portion that has been invalidated.

9.4 SUCCESSORS AND ASSIGNS. This Section 9 shall be binding upon the
Corporation, its successors and assigns, and shall inure to the benefit of
the Indemnitee's heirs, administrators, executors, personal representatives
and assigns and to the benefit of the Corporation, its successors and assigns.

9.5 AMENDMENTS. No amendment to or modification of this Section 9 or
any portion hereof shall limit any Indemnitee's entitlement to
indemnification in accordance with the provisions

16
<PAGE>

hereof with respect to any acts or omissions of Indemnitee which occur or
accrue prior to such amendment or modification.

9.6 CONTRIBUTION. If the indemnity provided for in this Section 9 is
for any reason unavailable or insufficient to hold harmless an Indemnitee
with respect to any Expenses, the Corporation shall make a contribution to
the Indemnitee for such liabilities to which the Indemnitee may be subject in
such proportion as is appropriate to reflect the intent of this Section 9.

9.7 RELIANCE. Each person who is serving as an Indemnitee shall be
deemed to be doing so in reliance upon the indemnification provided for in
this Section 9. The rights of an Indemnitee hereunder shall be contract
rights and shall vest in the Indemnitee upon the occurrence of the event, or
the first event in a chain of events, giving rise to such Claim; provided
that the adoption of the By-laws shall not affect any right or obligation of
the Corporation or of any Indemnitee which existed prior to such adoption.

9.8 NONEXCLUSIVITY. (a) The rights conferred herein on any person
shall (i) be severable, (ii) not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, certificate of
incorporation, contract or other agreement, authorization of stockholders or
disinterested directors or otherwise, and (iii) continue as to an Indemnitee
who has ceased to serve on behalf of the Corporation in respect of all claims
arising out of action (or inaction) occurring prior to such time.

(b) It is the intent of the Corporation to indemnify and hold
harmless Indemnitee to the fullest extent permitted by Delaware Law, as such
law exists or may be amended after the date the By-laws are adopted, but, in
the case of any such amendment, only to the extent that such amendment
permits the Company to provide broader indemnification rights than Delaware
Law permitted prior to the amendment, notwithstanding any provision in
Section 9 to the contrary.

9.9 INSURANCE. The Corporation may procure or maintain insurance or
other similar arrangement on behalf of any Indemnitee or any person who is or
was an employee or agent of the Corporation, or is serving at the request of
the Corporation as an employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted
against or incurred by him in his capacity as such, or arising out of his
status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of Delaware Law.
Without limiting the power of the Corporation to procure or maintain any
other kind of insurance or similar arrangement, the Corporation may create a
trust fund or other form of self-insurance arrangement for the benefit of any
Indemnitee or such other person to the fullest extent authorized by Delaware
Law.

SECTION 10
GENERAL PROVISIONS

10.1 FIXING RECORD DATE. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to

17
<PAGE>

exercise any rights in respect to any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board may fix in advance a
record date which shall not be more than 60 nor less than ten days before the
date of such meeting, nor more than 60 days prior to any other action.
Except as otherwise provided in the By-laws, a determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting, provided, however, that the Board
may fix a new record date for the adjourned meeting.

10.2 DIVIDENDS. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Certificate of Incorporation. Before
payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the directors from
time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the Corporation, or for such other purpose as
the directors shall think conducive to the interest of the Corporation, and
the directors may modify or abolish any such reserve in the manner in which
it was created.

10.3 CHECKS. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person
or persons as the Board may from time to time designate.

10.4 FISCAL YEAR. The fiscal year of the Corporation shall be fixed by
resolution of the Board.

10.5 SEAL. The corporate seal shall have inscribed thereon the name of
the Corporation and shall be in such form as may be approved from time to
time by the incorporator, or, after the appointment of directors, the Board
of Directors. The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.

SECTION 11
DEFINITIONS

The following terms, for all purposes of the By-laws, shall have the
following meaning:

"Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations promulgated under the Securities Exchange Act of 1934, as
amended (the term "registrant" in such Rule 12b-2 meaning in this case
the Corporation); provided, however, that in no event shall the
Corporation, any of its Subsidiaries, any employee benefit plan or any
of the other persons or entities exempted from the definition of
Interested Stockholder as provided in the Certificate of Incorporation
be deemed to be an Affiliate or Associate of any Interested Stockholder.

18
<PAGE>

A person shall be deemed to be the "Beneficial Owner" of any
shares of Capital Stock (regardless whether owned of record):

(1) Which that person or any of its Affiliates or
Associates, directly or indirectly, owns beneficially;

(2) Which such person or any of its Affiliates or
Associates has (A) the right to acquire (whether exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (B) the right to vote pursuant to
any agreement, arrangement or understanding; or

(3) Which are beneficially owned, directly or
indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of voting capital
stock of the Corporation or any Subsidiaries.

"Capital Stock" means any Common Stock, Preferred Stock or other
shares of capital stock of the Corporation.

"Certificate of Incorporation" shall mean the certificate of
incorporation of the Corporation, as it may be amended from time to
time.

"Claim" shall mean any threatened, pending or completed claim,
action, suit or proceeding, including appeals, whether civil, criminal,
administrative or investigative and whether made judicially or
extra-judicially, including any action by or in the right of the
Corporation, or any separate issue or matter therein, as the context
requires.

"Common Stock" shall mean the common stock of the Corporation, as
provided for in the Certificate of Incorporation.

"Continuing Director" shall have the meaning ascribed to it in the
Certificate of Incorporation.

"Delaware Law" shall mean the General Corporation Law of the State
of Delaware.

"Determining Body" shall mean (i) those members of the Board of
Directors who do not have a direct or indirect interest the Claim for
which indemnification is being sought ("Impartial Directors"), if there
are at least two Impartial Directors, (ii) a committee of at least two
Impartial Directors appointed by the Board or a duly authorized
committee thereof (regardless of whether the directors voting on such
appointment are Impartial Directors) and composed of Impartial
Directors or (iii) if there are fewer than two Impartial Directors or
if the Board or a duly authorized committee thereof so directs
(regardless whether the members

19
<PAGE>

thereof are Impartial Directors), independent legal counsel, which may
be the regular outside counsel of the Corporation, as determined by the
Impartial Directors or, if no such directors exist, the full Board.

"Disbursing Officer" shall mean the Chief Financial Officer of the
Corporation or, if the Chief Financial Officer has a direct or indirect
interest in the Claim for which indemnification is being sought, any
officer who does not have such an interest and who is designated by the
Chief Executive Officer to be the Disbursing Officer with respect to
indemnification requests related to the Claim, which designation shall
be made promptly after receipt of the initial request for
indemnification with respect to such Claim.

"Expenses" shall mean any expenses or costs, including, without
limitation, attorney's fees, judgments, punitive or exemplary damages,
fines, excise taxes or amounts paid in settlement.

"Indemnitee" shall mean any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at
the request of the Corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, trust
or other enterprise (including, without limitation, employee benefit
plans of the Corporation).

"Preferred Stock" shall mean the preferred stock of the
Corporation, as provided for in the Certificate of Incorporation.

"Subsidiary" means any corporation, partnership or other entity of
which the Corporation, directly or indirectly, owns voting stock or
similar interests having a majority of the votes entitled to be cast.

"Voting Stock" means the outstanding shares of Capital Stock
entitled to vote generally in an election of directors.

SECTION 12
AMENDMENTS

The Corporation's By-laws may be altered, amended, or repealed or new
By-laws may be adopted by:

(a) the stockholders, but only upon the affirmative vote of
holders of not less than 80% of the Voting Stock, voting together as a
single class; or

(b) the Board, but only upon the affirmative vote of both (i) a
majority of the directors then in office and (ii) a majority of the
Continuing Directors, voting as a separate group.

<PAGE>

COMMON STOCK COMMON STOCK

[VIGNETTE]

NUMBER SHARES

FSC

Incorporated under the laws CUSIP _____________________________
of the State of Delaware See Reverse for Certain Definitions

FREEPORT-MCMORAN SULPHUR INC.

THIS IS TO CERTIFY THAT

IS THE OWNER OF

FULLY PAID AND NON-ASSESSABLE SHARES, OF THE PAR VALUE OF
ONE CENT ($.01) PER SHARE, OF THE COMMON STOCK OF
Freeport-McMoRan Sulphur Inc., transferable on the books of
the Corporation by the holder hereof in person or by duly
authorized attorney upon surrender of this certificate
properly endorsed. This certificate and the shares
represented hereby are issued and shall be held subject to
all the provisions of the Certificate of Incorporation, as
amended, copies of which are on file with the Transfer
Agent, to all of which the holder by acceptance hereof
assents. This certificate is not valid until countersigned
and registered by the Transfer Agent and Registrar.

Witness the seal of the Corporation and the signatures
of its duly authorized officers.

Dated [SEAL OF FREEPORT-MCMORAN SULPHUR INC.]

COUNTERSIGNED AND REGISTERED:
MELLON SECURITIES TRUST COMPANY
(New York) Transfer Agent /s/ James R. Moffett
and Registrar Co-Chairman of the Board

By /s/ Michael C. Kilanowski, Jr.
Authorized Signature Secretary

<PAGE>

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ____________
in common (State)
</TABLE>
Additional abbreviations may also be used though not in the
above list.

For value received, _______________ hereby sell, assign and transfer
unto
Please insert social security or other
identifying number of assignee
_________________________________

_________________________________

______________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)

______________________________________________________________________

_______________________________________________________________ shares
of the capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint_____________________________

________________________________Attorney to transfer the said stock
on the books of the within named Corporation with full power of
substitution in the premises.

Dated _______________

____________________________________________________________________

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

_____________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN ANY APPROVED SIGNATURE GUARANTEED
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

This certificate also evidences certain Rights as set forth in a
Rights Agreement between Freeport-McMoRan Sulphur Inc. and Mellon
Securities Trust Company, as Rights Agent dated as of _________ __, 1997
(the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of the Corporation. The Corporation will mail to
the holder of this certificate a copy of the Rights Agreement without
charge promptly after receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be evidenced by separate certificates and no longer be
evidenced by this certificate, may be redeemed or exchanged or may
expire. As set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may be null and void.

<PAGE>

EXHIBIT 5.1

JONES, WALKER,
WAECHTER, POITEVENT,
CARRERE & DENEGRE, L.L.P.

November 17, 1997

Freeport-McMoRan Sulphur Inc.
1615 Poydras Street
New Orleans, Louisiana 70112

Dear Sirs:

We have acted as counsel to Freeport-McMoRan Sulphur Inc. (the "Company")
in connection with the preparation of the registration statement on Form S-1
(the "Registration Statement") filed by you with the Securities and Exchange
Commission on the date hereof, with respect to the distribution of up to
5,338,513 shares of Common Stock, $.01 par value per share together with
associated preferred stock purchase rights (the "Shares") in connection with
the merger of Freeport-McMoRan Inc. with and into IMC Global Inc. pursuant to
the terms of a Merger Agreement dated August 26, 1997 (the "Merger
Agreement"). In so acting, we have examined original, or photostatic or
certified copies, of such records of the Company, certificates of officers of
the Company and of public officials, and such other documents as we have
deemed relevant. In such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
documents.

Based upon the foregoing, we are of the opinion that the Shares, when
issued in accordance with the terms of the Merger Agreement, shall be duly
authorized, validly issued, fully paid and non-assessable shares of the
Company's Common Stock.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the caption "Legal Matters"
as counsel for the Company. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the general rules and regulations of the
Commission.

Very truly yours,

/s/ Jones, Walker, Waechter,
Poitevent, Carrere & Denegre L.L.P.

JONES, WALKER, WAECHTER,
POITEVENT, CARRERE & DENEGRE, L.L.P.

<PAGE>

[MILLER & CHEVALIER, CHARTERED LETTERHEAD]

November 17, 1997

Freeport-McMoRan Inc.
1615 Poydras Street
New Orleans, LA 70161

Ladies and Gentlemen:

We have reviewed the IMC Global Inc. Registration Statement on Form S-4,
dated November 12, 1997, which includes the Joint Proxy Statement and
Prospectus of IMC Global Inc. and Freeport-McMoRan Inc. (the "Prospectus")
and the Freeport-McMoRan Sulphur Inc. Registration Statement on Form S-1,
dated November 12, 1997, relating to the merger of Freeport-McMoRan Inc. into
IMC Global Inc. (the "Merger"), and the distribution of Freeport-McMoRan
Sulphur Inc. common stock in the Merger, respectively.

This will confirm that our opinions are set forth under the headings
"Certain United States Federal Income Tax Consequences" in the Prospectus and
"Certain Federal Income Tax Consequences" in the Form S-1, and such
discussions are fair, complete, and accurate in all material respects. Our
opinions are subject to the qualifications stated under each heading.

We consent to the use of this opinion as an exhibit to the Form S-4
Registration Statement and the Form S-1 Registration Statement filed with the
SEC in connection with the Merger and the distribution of Freeport-McMoRan
Sulphur Inc. common stock, and to the references to us as tax counsel to FTX in
such filings.

Very truly yours,

MILLER & CHEVALIER, CHARTERED

By: /s/ Thomas W. Mahoney, Jr.
----------------------------
Thomas W. Mahoney, Jr.

<PAGE>

EXHIBIT B
TO CONTRIBUTION AND
DISTRIBUTION AGREEMENT

EMPLOYEE BENEFITS AGREEMENT

This EMPLOYEE BENEFITS AGREEMENT, dated as of __________, 1997,
entered into by FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a
Delaware limited partnership (together with its successors and permitted
assigns, "FRP"), FREEPORT-McMoRan INC., a Delaware corporation (together with
its successors and permitted assigns, "FTX") and FREEPORT-McMoRan Sulphur
Inc., a Delaware corporation (together with its successors and permitted
assigns, "COMPANY"),

WITNESSETH:

WHEREAS, the parties hereto have entered into a CONTRIBUTION AND
DISTRIBUTION AGREEMENT, which includes covenants regarding assets and
liabilities of FRP that are to be transferred to Company; and

WHEREAS, the parties desire to provide for the transfer of assets and
liabilities pertaining to certain employee-benefit plans maintained by FTX for
the benefit of FTX employees who have in the past provided services for FRP, and
to provide regarding the compensation and benefits of those of such employees
who will be employees of Company;

NOW, THEREFORE, the parties hereto agree as follows:

1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meaning set forth below.

(a) "Adjusted Company Award" shall mean a non-qualified stock option
to purchase Company Shares with in tandem "limited rights" that results from the
adjustment and conversion of an FTX Award pursuant to Paragraph 5.

(b) "Adjusted FTX Award" shall mean an FTX Award that is adjusted in
accordance with the provisions of Paragraph 5.

(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(e) "Company Pension Plan" shall mean a defined-benefit pension plan
sponsored by Company for the benefit of Transferred Employees.

<PAGE>

(f) "Company Shares" shall mean Common Stock, par value $______ per
share, of the Company.

(g) "Distribution Date" shall mean the effective date of the
Distributions.

(h) "Effective Time" shall mean the date of the merger of
Freeport-McMoRan Inc. into IMC Global Inc.

(i) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.

(j) "Former Sulphur Employee" shall mean an employee who (i) either
(A) retired from FTX or an Affiliate under circumstances making him eligible
under one or more plans or arrangements of FTX or the Affiliate to receive
medical, dental or life insurance benefits during retirement, or (B) terminated
employment from FTX or an Affiliate under circumstances making him eligible for
benefits under the FTX Pension Plan, and (ii) during all of his or her last
three years of employment, provided services primarily for the Transferred
Businesses.

(k) "FTX AIP" shall mean the Freeport-McMoRan Inc. Annual Incentive
Plan.

(l) "FTX Award" shall mean a stock option, stock appreciation right,
limited right, stock incentive unit or other award relating to FTX Shares that
has been granted under an FTX Stock Plan and is outstanding on the Distribution
Date and held by any person other than an employee of IMC-Agrico Company.

(m) "FTX Benefit Arrangements" shall mean each employment, severance,
termination, consulting, retirement or similar contract, arrangement or policy,
and each plan or arrangement (whether or not written) providing for severance
benefits, insurance coverage (including any self-insured arrangements),
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive compensation or
post-retirement insurance, compensation or benefits that (i) is not an FTX
Employee Plan, (ii) is entered into, maintained, or contributed to, as the case
may be, by FTX or any of its affiliates and (iii) covers any Transferred
Employee.

(n) "FTX EBP" shall mean the Freeport-McMoRan Inc. Excess Benefits
Plan.

(o) "FTX Employee Plans" shall mean each "employee benefit plan," as
defined in Section 3(3) of ERISA, that (i) is subject to any provision of
ERISA, (ii) is maintained, administered or contributed to by FTX and
(iii) covers any Transferred Employee.

(p) "FTX ECAP" shall mean the Freeport-McMoRan Inc. Employee Capital
Accumulation Program.

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(q) "FTX Grandfathered Plan" shall mean the Freeport-McMoRan Inc.
Grandfathered Retirement Benefit Plan.

(r) "FTX LTPIP" shall mean either or both of the Freeport-McMoRan
Inc. 1987 Long-Term Performance Incentive Plan and the Freeport-McMoRan
Inc. 1992 Long-Term-Performance Incentive Plan.

(s) "FTX Pension Plan" shall mean the FMI Employee Retirement Plan.

(t) "FTX PIAP" shall mean the Freeport-McMoRan Inc. Performance
Incentive Awards Program.

(u) "FTX PAP" shall mean the Freeport-McMoRan Inc. President's Award
Program.

(v) "FTX SECAP" shall mean the Freeport-McMoRan Inc. Supplemental
Executive Capital Accumulation Plan.

(w) "FTX Shares" shall mean shares of FTX common stock, par value
$.01 per share.

(x) "Retired Employees" shall mean all former and retired employees
of FTX and its subsidiaries, and long-term disabled employees of FTX and
its subsidiaries who did not work primarily for the Transferred Businesses,
as of the Effective Time, including those persons who retire from FTX at
any time up to the date of the Merger.

(y) "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section 16
of the Securities Exchange Act of 1934, and any successor provision.

(z) "Section 162(m)" shall mean Section 162(m) of the Code and any
memoranda or decisions issued by the Internal Revenue Service or the
Department of the Treasury with respect thereto.

(aa) "Securities Act" shall mean the Securities Act of 1933, as
amended.

(bb) "Transferred Employees" shall mean those employees of FTX or its
subsidiaries who by mutual agreement between FTX and Company become
employees of Company on or about the Effective Time, or who are actively
employed in the Transferred Businesses (as defined in the Contribution and
Distribution Agreement) on the Effective Time. Employees of FM Services
Inc. and its subsidiaries are not Transferred Employees.

Capitalized terms used in this document that are not defined herein shall
have the meanings set forth in the Contribution and Distribution Agreement
having the same date and entered into by the same parties.

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<PAGE>

2. EMPLOYMENT BY THE COMPANY.

(a) Each Transferred Employee will become an employee of Company on
or before the Effective Time. Except as otherwise provided in this Agreement,
Company will not assume the liabilities of FTX in respect of the Transferred
Employees for accrued but unpaid salaries, wages, or other compensation or
benefits with respect to service prior to the Effective Time, which liabilities
shall remain with FTX.

(b) No provision of this Agreement shall preclude or impair the
ability of Company to terminate the employment of any Transferred Employee or to
change the terms, conditions or location of employment following the Effective
Time.

3. PENSION PLANS.

(a) As of the Effective Time, FTX shall cause to be transferred to a
newly-created separate defined-benefit pension plan (the "Spin-Off Plan") the
assets and liabilities of the FTX Pension Plan that are attributable to the
Transferred Employees. The Spin-Off Plan shall have substantially the same
terms and conditions as the FTX Pension Plan, subject to any limitation required
by Company regarding accrual of benefits after the Effective Time. In
connection with the transfer, FTX shall make all filings and submissions to
governmental agencies as are required by law, and shall make all amendments to
the FTX Pension Plan and related trust agreement as are necessary. The accrued
benefits attributable to the Transferred Employees shall be 100% vested. The
transfer shall be made as of the "Transfer Date", which shall be the Effective
Time, or at such other time as is mutually agreed upon by FTX and Company.

(b) The amount of the assets required under Paragraph (a) to be
transferred (the "Transfer Amount") shall be equal to the Account Balances of
the Transferred Employees under the FTX Plan as of the Effective Time, including
Annual Additions with respect to Earnings throught the Effective Time and Annual
Interest Credits through the Effective Time. The Transfer Amount shall in no
event be less than the minimum amount necessary to satisfy all requirements of
the Code and regulations. The Transfer Amount shall be transferred within 30
days after the Effective Time. The terms Account Balance, Earnings, Annual
Additions, and Annual Interest Credits as used in this paragraph have the same
meaning as in the FTX Pension Plan.

(c) As of the Effective Time (or such other date as agreed to by the
Company and FTX) Company shall become the sponsor of the Spin-Off Plan referred
to in Paragraph (a) (hereafter "Company Pension Plan") and its related trust,
which will hold the Transfer Amount. Company shall take all necessary steps,
including the prompt filing of an application to the Internal Revenue Service
for a favorable determination letter, to assure that the Company Pension Plan is
qualified under Internal Revenue Code Section 401(a). As of the date of the

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<PAGE>

transfer of the Transfer Amount, the Company Pension Plan shall assume the
liabilities of the FTX Pension Plan that are attributable to the Transferred
Employees, and the FTX Pension Plan (and FTX as sponsor of the FTX Pension Plan)
shall have no further liability with respect to the Transferred Employees.
Company shall be under no obligation to accrue benefits under the Company
Pension Plan after the Effective Time at the same rate as under the FTX Pension
Plan, and may terminate the Company Pension Plan. Company shall have no
obligations or liabilities arising under or attributable to the FTX Pension
Plan, other than as described above.

(d) As of the Effective Time, Company shall assume the liabilities in
respect of Transferred Employees under the FTX EBP and the FTX Grandfathered
Plan, and FTX shall have no further obligation under such plans with respect to
such employees. As consideration for the assumption of such liabilities by
Company, FTX shall pay to Company an amount, estimated at $700,000, that the
plans' actuary shall determine is equal to the value as of the Effective Time of
the benefits accrued under the plans by the Transferred Employees. The value of
a Transferred Employee's accrued benefit under the FTX EBP shall be equal to the
difference between the Participant's actual Account Balance under the FTX
Pension Plan and the Account Balance the Participant would have had under the
assumptions set forth in the FTX EBP. The value of a Transferred Employee's
accrued benefit under the FTX Grandfathered Plan shall be determined under the
assumptions of that plan as if the Transferred Employee had retired as of the
Effective Time and elected to receive an immediate lump-sum benefit. The
payment with respect to the FTX Grandfathered Plan shall be made only with
respect to the Transferred Employees (if any) who have reached the age of 55 by
the Effective Time. Company shall have no obligation to allow Transferred
Employees to continue to accrue benefits under such plans after the Effective
Time.

4. INDIVIDUAL ACCOUNT PLANS

(a) As of the Effective Time, Company shall adopt the FTX ECAP and
its related trust, and the documents governing said plan and trust shall be
amended by FTX and the Company to provide that, commencing at the Effective
Time, FTX will no longer have any powers or duties with respect to said plan and
trust, and the Company will have all powers and duties with respect to the plan
and trust that pertain to a plan sponsor. Within 15 days following the Effective
Time, FTX shall pay to the trustee of said trust any amounts payable to the
trust that it has received or withheld from participants, and any matching
contributions due under said plan.

(b) The FTX ECAP will be amended prior to the Effective Time to
permit it to hold Company shares.

(c) As of the Effective Time, the FTX SECAP document shall be amended
by FTX and the Company to provide that the Company assumes all liabilities in
respect of Transferred Employees under the FTX SECAP, and that FTX has no
further obligation under the FTX SECAP with respect to the account balances of
Transferred Employees. As consideration for the assumption of such liabilities
by Company, FTX shall pay to Company an amount equal to the account balances of
the Transferred Employees valued as of the date of the

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<PAGE>

transfer. As the vehicle for satisfying the liabilities assumed under this
Paragraph (c), Company shall establish a Company SECAP. All account balances
of Transferred Employees in the Company SECAP shall be 100% vested. Company
shall have the right to amend or terminate the Company SECAP at any time,
provided that no amendment shall reduce participant account balances.

(d) The FTX SECAP will be amended prior to the Effective Time to
require immediate payout with respect to all participants other than the
Transferred Employees.

5. STOCK PLAN ADJUSTMENTS; ESTABLISHMENT OF NEW ADJUSTED STOCK AWARD
PLAN.

(a) Effective as of the Distribution Date, the Company shall adopt
the Adjusted Stock Award Plan and shall take all action necessary in regard to
such Plan, the benefits provided thereunder, and the transactions contemplated
thereby to ensure compliance with Rule 16b-3, Section 162(m) and the Securities
Act, as applicable and as deemed desirable by the Company. The Adjusted Stock
Award Plan shall be established for the exclusive purpose of granting the
Adjusted Company Awards as described in this Paragraph 5.

(b) Each outstanding FTX Award on the Distribution Date shall be
converted, in accordance with the procedures described in this Paragraph 5, into
an Adjusted FTX Award and an Adjusted Company Award. The number of Company
Shares subject to an Adjusted Company Award shall be that number of Company
Shares that a record holder of the number of FTX Shares underlying the related
FTX Award would have received in the FTX Distribution. Notwithstanding the
foregoing, if the FTX Award from which the Adjusted Company Award is derived
contains a right to receive a cash payment upon exercise of such FTX Award
related to and intended to defray the income tax liability associated therewith,
the number of Company Shares to be subject to the Adjusted Company Award,
determined according to the provisions of this Paragraph 5(b) (without
disregarding fractional Company Shares), shall be multiplied by 1.6556 and any
fractional Company Share resulting from such adjustment shall be disregarded.
Such adjustment shall not affect the calculation of the per Company Share
exercise price of the Adjusted Company Award as set forth in Paragraph 5(e)
below.

(c) Each Adjusted Company Award and each Adjusted FTX Award will have
the same remaining duration as the FTX Award from which it was derived.

(d) The exercise price of an Adjusted FTX Award shall be determined
by multiplying the exercise price of the FTX Award from which such Adjusted FTX
Award was derived by a fraction, the numerator of which is the FTX Net
Distribution Value, as defined below, and the denominator of which is the FTX
Distribution Value, as defined below.

(e) The exercise price of an Adjusted Company Award shall be
determined by multiplying the exercise price of the FTX Award from which such
Adjusted Company Award was derived by a fraction, the numerator of which is the
Company Distribution Value, as defined below, and the denominator of which is
the FTX Distribution Value.

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<PAGE>

(f) For purposes of the foregoing, the "Company Distribution Value"
shall be the weighted average per share price of the Company Shares on the New
York Stock Exchange on the first day that Company Shares are traded on the New
York Stock Exchange after the effective date of the merger of Freeport-McMoRan
Inc. into IMC Global Inc.; the "FTX Distribution Value" shall be the weighted
average per share price of the FTX Shares on the New York Stock Exchange on the
last day that FTX Shares are traded on the New York Stock Exchange before the
effective date of the merger of Freeport-McMoRan Inc. into IMC Global Inc. and
the "FTX Net Distribution Value" shall be (i) the FTX Distribution Value minus
(ii) the product of the Distribution Ratio, as hereinafter defined, and the
Company Distribution Value. The "Distribution Ratio" shall mean the number of
Company Shares distributed in the FTX Distribution per FTX Share, rounded to the
nearest one-millionth (.000001) of a Company Share.

6. DEFERRED COMPENSATION LIABILITIES. As of the Distribution, FTX shall
calculate the liability of FTX and its subsidiaries in respect of the
Transferred Employees' deferred compensation, including without limitation
deferred awards under the FTX PIAP, FTX AIP, FTX LTPIP, and predecessor plans,
if any. In consideration of a cash payment made promptly after the Distribution
Date by FTX to the Company in an amount equal to such accrued liability, the
Company will assume such liability in respect of Transferred Employees.

7. WELFARE PLANS.

(a) As of the Effective Time, Transferred Employees shall cease
participation in all FTX Employee Plans and FTX Benefit Arrangements. Except as
otherwise set forth in this Agreement or in the Merger Agreement, FTX shall
retain all obligations and liabilities under the FTX Employee Plans and FTX
Benefit Arrangements.

(b) FTX and its FTX Employee Plans and FTX Benefit Arrangements shall
retain responsibility for the administration, liability, cost of coverage and
all amounts payable by reason of claims incurred by Transferred Employees (and
their dependents and beneficiaries) on or before the Effective Time, by reason
of claims incurred by Retired Employees, and by reason of claims incurred by FTX
employees who as of the Effective Time were on a leave of absence or were
receiving long term disability benefits, sick leave benefits, or similar
benefits. However, the Company shall assume responsibility for the
administration, liability, cost of coverage, and all amounts payable by reason
of employee benefit plan claims incurred by FTX employees (and their dependents)
who at the time the employees ceased active work for FTX performed services
primarily for the Transferred Businesses and who as of the Effective Time were
on a leave of absence or were receiving long term disability benefits, sick
leave benefits, or similar benefits. For such purpose, unless otherwise agreed
by FTX and the Company, a claim is deemed incurred on the date of the occurrence
of (i) death, dismemberment, accident, or other loss in the case of claims under
life insurance and accidental death and dismemberment benefits, (ii) in the case
of a hospital stay, based on the date any such hospitalization is initiated, or
(iii) the date on which the treatment or other service was rendered or the
medicine, equipment, supply or other material was furnished, as the case may be,
which resulted in the charge or expense giving rise to the claim in the case of
all other claims. This paragraph 7(b) shall not apply to claims under
applicable workman's compensation laws, the Jones Act, 46 U.S.C. Section 688,

7
<PAGE>

the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. Section 901, et.
seq., or under similar laws, or arising in connection with any occupational
injury or disease.

(c) As of the Effective Time, Company shall be responsible for
post-retirement benefit liabilities in respect of Transferred Employees and FTX
shall have no further obligation for such liabilities with respect to such
employees. FTX shall pay to Company an amount that equals the liability that
has been accrued for such employees in accordance with the Financial Accounting
Standard Board No. 106 as provided in the Freeport-McMoRan Inc. Retiree Benefit
Plan's January 1, 1997 valuation report.

(d) The Company shall reimburse FTX for any payment (a "Reimbursable
Payment") that FTX properly makes to or on behalf of a Former Sulphur Employee
with respect to claims made after the Effective Time (or to an insurance company
to provide coverage for a Former Sulphur Employee after the Effective Time)
under the terms of any retiree medical, dental or life insurance plan or
arrangement of FTX. No later than 30 days following the end of each calendar
quarter, FTX shall provide the Company with a report providing in reasonable
detail its calculation of the total amount of Reimbursable Payments made by FTX
during the quarter, less any refunds or other offsetting payments or credits
received by FTX. The amount that Company shall reimburse FTX shall be equal to
the net amount of Reimbursable Payments by FTX, less the Credit Amount. The
Credit Amount for each calendar quarter shall be equal to 25% of 9.5% of a
fraction of the "Surplus", as defined below, which fraction shall be derived by
dividing the liabilities under the FTX Pension Plan as of the Effective Time
attributable to the Former Sulphur Employees by the total liabilities of the FTX
Pension Plan as of the Effective Time. The Surplus shall be the fair market
value of the assets of the FTX Pension Plan, less the total liabilities of the
FTX Pension Plan, as of the Effective Time. The assets and liabilities used in
this Paragraph 7(d) to calculate the Surplus and the appropriate fraction of the
Surplus shall be determined as of the Effective Time, but only with regard to
the portion of the FTX Pension Plan that remains after the transfer described in
Section 3(b) of this Agreement. Furthermore, for purposes of this Section 7(d),
the assets and liabilities of the FTX Pension Plan (after the transfer described
in Section 3(b) shall be determined on a FAS 87/88 basis. If the Credit Amount
for the current calendar quarter (plus any carried-forward excess from the
preceding calendar quarter) exceeds the Reimbursable Payments in a quarter no
payment shall be made between the parties. Any excess Credit Amount for the
current calendar quarter shall be carried forward to the next calendar quarter.
Company shall have the right to request an annual audit of the Reimbursable
Payments by an independent certified public accountant. This paragraph is not
intended to limit any rights that FTX may have to reduce its obligations under
any such plans or arrangements. However, FTX shall have no right to increase
its cost of benefits for any Former Sulphur Employee without obtaining 30-days
advance approval from Company. Nor shall FTX have the right to reduce the cost
of coverage for any Retired Employees who are not Former Sulphur Employees
without likewise reducing the cost of coverage for the Former Sulphur Employees.

(e) With respect to employees and their dependents (other than
Transferred Employees) who experience a qualifying event as defined in 29 U.S.C.
Section 603 as a result of the transactions contemplated in the Contribution and
Distribution Agreement and the Merger

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<PAGE>

Agreement and who elect COBRA continuation group health coverage under 29
U.S.C. Sections 601, et. seq. ("COBRA Coverage"), the Company shall reimburse
FTX for any Reimbursable Payment that FTX properly makes to or on behalf of
such employees or dependents with respect to claims made after the Effective
Time under the plan providing such COBRA coverage (or to an insurance company
to provide COBRA Coverage for such employees or dependents after the
Effective Time) in accordance with the procedures set forth in 7(d) above.

(f) The employee benefit plans established by the Company for the
benefit of Transferred Employees shall give effect, in determining or applying
any copayments, benefit limits, deductibles and maximum out-of-pocket
limitations to claims incurred, amounts paid by, and amounts reimbursed to, such
employees under the corresponding FTX Employee Plans or FTX Benefit Arrangements
maintained by FTX for their benefit immediately prior to the Effective Time.
Further, the employee benefit plans established by the Company for the
Transferred Employees shall give credit for service at FTX and its subsidiaries
for purposes of any eligibility waiting periods and pre-existing condition
limitations. The employee benefit plans established by the Company that provide
a maximum annual benefit, such as a vacation plan or wage and salary
continuation, will take into account benefits used by the Transferred Employees
under the corresponding FTX Employee Plans or FTX Benefit Arrangements
maintained by FTX for their benefit immediately prior to the Effective Time.

(g) The Company will give Transferred Employees full credit for
purposes of eligibility, vesting, benefit accrual and benefit entitlement (as
such purposes may be applicable) under the employee benefit plans of the Company
for such employees' respective service recognized or applied for such purposes
under the corresponding FTX Employee Plan or FTX Benefit Arrangement, to the
extent applicable.

(h) FTX and the Company shall provide each other with copies of such
records as are reasonably required to enable the parties to perform their
obligations hereunder.

8. CASH BONUSES. As of the Effective Time, FTX shall in good faith
determine the total amount of cash incentive payments that it would have made to
the Transferred Employees under the FTX PIAP and the FTX PAP for 1997 (without
proration for a partial year), which determination shall be subject to the
limitations and other terms and conditions of Schedule 5.8(c) to the Merger
Agreement. In consideration of a cash payment made promptly after the Effective
Time by FTX to the Company in an amount equal thereto, the Company will assume
the payment of such amounts to the Transferred Employees, which will be made as
soon as feasible after 1997 in accordance with any procedures it may establish
with respect to the payment of any cash incentive payments to Company employees.

9. EXPENSES. Each of the Company and FTX shall pay its own expenses in
connection with the performance of its obligations under this Agreement.

10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Louisiana.

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<PAGE>

11. AMENDMENT AND WAIVER. This Agreement may not be altered or amended,
nor may rights hereunder be waived, except by an instrument in writing executed
by each party, or in the case of a waiver by an instrument in writing executed
by the party against whom such waiver is to be effective. No waiver of any
term, provision or condition of or failure to exercise or delay in exercising
any rights or remedies under this Agreement, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, provision, condition, right or remedy or as a waiver of any other term,
provision or condition of this Agreement.

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

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

FREEPORT-McMoRan INC.

By:
------------------------------
Name:
Title:

FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP

By: FREEPORT-McMoRan INC.,
Administrative Managing General Partner

By:
------------------------------
Name:
Title:

<PAGE>

ASSET SALE AGREEMENT
MAIN PASS BLOCK 299

THIS AGREEMENT, dated May 2, 1990, between:

CHEVRON U.S.A. INC., a Pennsylvania corporation with its principal place of
business in Louisiana at 935 Gravier Street, New Orleans, Louisiana 70112
("Seller); and

FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a Delaware limited
partnership ("Freeport"), with its principal place of business in Louisiana
at 1615 Poydras Street, New Orleans, Louisiana 70112, referred to herein as
"Buyer",

W I T N E S S E T H:

That Seller desires to sell to Buyer and Buyer desires to purchase from
Seller on the terms set forth in this Agreement those certain oil and gas
interests and associated assets identified in Exhibits "A" and "B" attached
hereto and made a part hereof. Accordingly, Seller and Buyer agree as
follows:

1. SALE AND PURCHASE OF ASSETS

1.1 ASSETS TO BE SOLD. Seller shall sell, transfer, and assign, or cause
others to sell, transfer and assign to Buyer, and Buyer shall purchase
and receive the following, to-wit:

1.1.1 All of Seller's right, title and interests in and to the
Segregated Lease, as defined in Exhibit "A". Seller reserves
all other rights in the "Lease" (as identified in
Exhibit "A"), such other rights being the "Retained Lease".

1.1.2 All of Seller's right, title and interest in and to the
materials, equipment, services and contract rights described
in Exhibit "B" ("Physical Assets").

The Segregated Lease and Physical Assets are hereinafter collectively
referred to as "the Assets". Such transfer of interests will be made
and be effective at Closing.

1.2 INSTRUMENTS. Except as may be otherwise noted in this Agreement, the
Assets to be conveyed by Seller to Buyer Pursuant to Section 1.1
shall be conveyed by instruments in form and substance similar to
Exhibits "F-1" and "F-2," provided that the Physical Assets shall
be conveyed on an "as is" basis. Seller shall execute such other
Bills of Sale as may be required by Buyer for the Physical Assets.
The interests to be conveyed by Buyer to Seller shall be conveyed
by an instrument in form and substance similar to Exhibit "F-3" or
"F-4", as applicable.

1.3 SELLER'S ELECTION TO EFFECT IRC Section 1031 EXCHANGE. In the event
Seller so elects, Buyer agrees to attempt in good faith to
accommodate Seller in effecting a tax-deferred exchange of the
properties identified in Section 1.1.1, at the value referred to in
Section 2.1.1, under Internal Revenue Code Section 1031, as
amended. Seller shall have the right to elect this tax-deferred
exchange at any time prior to the date of Closing. If Seller elects
to effect a tax-deferred exchange, Buyer agrees to execute
additional escrow instructions, documents, agreements, or
instruments to effect the exchange, provided that Buyer shall incur
no additional costs, expenses, fees, taxes (including any state or
local sales, use or transfer taxes) or liabilities as a result of
or connected with the exchange. Further, in the event Seller elects
to effect a tax-deferred exchange, such transaction shall be
subject to the terms and provisions of Section 7.3 hereof and of an
agreement similar in form and substance to that attached hereto as
Exhibit "F-5."

<PAGE>

In connection with any such exchange, Buyer does not warrant or
represent that any such property selected by Seller will be
suitable for Sellers purpose nor that such exchange will qualify
for tax deferred treatment under Internal Revenue Code Section
1031. Seller will indemnify Buyer for any costs, expenses, fees,
taxes or liabilities arising from or in connection with any such
exchange, and for any claims made by any third party relating to
such exchange.

2. TERMS OF SALE

2.1 PRICE. As consideration for the sale of the Assets, Buyer shall pay
to Seller or its designee the following amounts:

2.1.1 For the Segregated Lease, One Hundred Thirty-Seven Million
United States dollars ($137,000,000).

2.1.2 For the Physical Assets, the amounts set forth in said
Exhibit "B" (as adjusted for the costs and expenses incurred
up to the Closing).

The amounts set forth in Sections 2.1.1 shall be paid at Closing by
wire transfer in Federal Funds to a bank account to be designated
by Seller. An invoice with supplier's documentation for the items
identified in Section 2.1.2 will be forwarded to Freeport under
separate cover within thirty (30) days after Closing. This invoice
will contain payment instructions and information as to the status
and condition of the materials and equipment being transferred.

2.2 ASSUMPTION OF OBLIGATIONS AND LIABILITIES. As additional
consideration for the sale of the Assets, Buyer shall assume all
obligations and liabilities relating to the ownership or use of the
Assets, including but by no means limited to the payment of
Production Payments, overriding royalty payments or the Final
Payment (if applicable) owing to Seller hereunder, and reclamation
and the plugging and abandonment of all wells drilled on the
Segregated Lease (but not including wells heretofore drilled
through the Segregated Lease to depths deeper than a subsea depth
of 1,900 feet), whether now or hereafter located on the Segregated
Lease. Buyer shall also assume all accounting and reporting duties
and obligations associated with use and ownership of the Assets
subsequent to the Closing. Such reclamation and plugging and
abandonment shall be performed in a good and workmanlike manner and
in accordance with the rules and regulations of the Minerals
Management Service and all other applicable laws. The sale will be
made subject to, and Buyer assumes all rights and obligations
arising under and in accordance with, the terms of the Segregated
Lease, and the agreements listed on Exhibit "A" hereto which affect
the Segregated Lease. Buyer shall assume and be responsible for
all obligations of Seller accruing under such agreements after the
Closing, to the extent such agreements apply to the Segregated
Lease.

2.3 INDEMNIFICATION BY BUYER. Buyer shall defend and indemnify Seller, and
shall save and hold Seller (and Sellers assignee under an exchange
agreement) free and harmless, from and against any and all liabilities,
penalties, fines, losses, injuries including death, demands, damages,
claims and causes of action, of any nature whatsoever, arising directly
or indirectly from or in connection with:

2.3.1 Seller's #11 well, previously drilled within the Segregated
Lease and which Seller represents was properly plugged and
abandoned by Seller;

2.3.2 Buyer's ownership or use of the Segregated Lease, or
operations conducted or caused to be conducted by or on
behalf of Buyer on, in, under or adjacent to the Segregated
Lease for the exploration for or development and production,
gathering, transportation, processing or treatment of oil or
gas or sulphur or any other mineral or substance from or
allocable to the Segregated Lease,

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<PAGE>

except to the extent that such liabilities, losses, injuries
including death, demands, damages, claims and causes of action are
finally established, in a ruling from a court of competent
jurisdiction not subject to appeal, to be the result of Seller's
(or, pursuant to an exchange agreement, Seller's assignee's)
negligence or other legal fault.

2.4 INDEMNIFICATION BY SELLER. Seller shall save and hold Buyer free and
harmless from and against any and all liabilities, penalties,
fines, losses, injuries including death, demands, damages, claims
and causes of action, of any nature whatsoever, arising directly or
indirectly from or in connection with Seller's ownership or use of
the Retained Lease, or operations conducted or caused to be
conducted by or on behalf of Seller on, in, or under the Retained
Lease for the exploration for or development and production,
gathering, transportation, processing or treatment of oil or gas or
sulphur or any other mineral or substance from or allocable to the
Retained Lease, except to the extent that such liabilities, losses,
injuries including death, demands, damages, claims and causes of
action are finally established, in a ruling from a court of
competent jurisdiction not subject to appeal, to be the result of
Buyer's negligence or other legal fault.

2.5 CLOSING. The Closing of the transactions contemplated herein and the
transfer of the Assets shall occur on or before June 1, 1990 (unless
additional time is required to satisfy the conditions precedent to
Closing, as provided in Section 7 hereof), at Chevron's office at 935
Gravier Street, New Orleans, Louisiana, at 10:00 a.m., local time, or
such other date, time, and place as Seller and Buyer may agree in
writing.

3. INTERESTS TO BE GRANTED TO BUYER BY SELLER

3.1 PRODUCTION PAYMENT.

3.1.1 Buyer shall grant, transfer, assign and convey to Seller a
"Production Payment" with regard to Buyer's oil production
from or attributable to the Segregated Lease (or any
extension, renewal or replacement of the Segregated Lease
acquired hereafter by Buyer or a parent, subsidiary or
affiliate of Buyer). Said Production Payment shall be
conveyed by an instrument in form and substance similar
either to Exhibit "F-3" or Exhibit "F-4" hereto, as
applicable pursuant to Section 3.2 or 3.3, and is to be
calculated on a calendar year basis, in accordance with
Exhibits "C" and "D" attached hereto. Buyer shall pay such
Production Payment to Seller on or before a date thirty (30)
days after the end of the calendar year to which such payment
applies, or on or before a date sixty (60) days after the
discontinuation of Production Payments as provided in
Section 3.2 hereof.

3.1.2 Concurrently with any such payment made pursuant to Section
3.1.1, Buyer shall furnish Seller a statement which shall
include information and data supporting and verifying the
amount of the Production Payment being tendered. Said
payment and said statement shall be sent to the following
address:

Chevron U.S.A. Inc.
P. 0. Box J, Section 724E
Concord, CA 94524

3.1.3 If Buyer does not make such a payment as required by Section
3.1.1 by the date such payment is due, the amount owed to
Seller shall accrue interest from the due date at the prime
interest rate posted from time to time by Chase Manhattan
Bank, New York, New York, or by such other bank as the
parties may hereafter mutually select in writing, plus two
percent (2%).

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3.2 OVERRIDING ROYALTY INTEREST - NO EXCHANGE.

3.2.1 This Section 3.2 shall apply only in the event Seller elects
not to effect a tax-deferred exchange as provided in
Section 1.3.

3.2.2 After cumulative oil production from or allocable to the
Segregated Lease produced, saved or used equals or exceeds
36 million stock tank barrels of oil, measured at Buyer's
production facility platform located on or adjacent to the
Segregated Lease (the ability to produce and save such
volumes of oil not being guaranteed by Buyer), or after a
date twenty (20) years from the date of first such oil
production, whichever occurs first, Seller's Production
Payment as provided for in Section 3.1.1 above shall convert
to an overriding royalty of 25% of the value of oil and gas
production thereafter produced and saved or used from or
allocable to the Segregated Lease. Such conversion shall be
set forth in an instrument similar in form and substance to
that attached hereto as Exhibit "F-3." Notwithstanding
anything foregoing in this Section 3.2 to the contrary, said
overriding royalty shall be calculated, determined and paid
on the same volumes of production on which the lessors
royalty is calculated, determined and paid; provided, this
25% overriding royalty due in any one month shall never
exceed 50% of the "net operating revenue" for such month. For
purposes of this Section 3.2, "net operating revenue" is
defined as gross value realized by the Buyer on production
saved and sold or used in the calendar month, less the
lessor's royalty and normal operating expenses as outlined in
Exhibit "E" attached hereto (excluding major workover
expenses (i.e., well work requiring a drilling or workover
rig), plugging and abandoning costs, and other expenditures
of a capital nature). Said overriding royalty shall be
calculated on the same basis as the lessors royalties as
provided for in the Segregated Lease and, based on such
calculation, shall be paid concurrently with payment of
royalties under the lease covering the Segregated Lease.
Additionally, said overriding royalty shall bear its
proportionate share of present or future severance, windfall
profits, excise or similar taxes. Any adjustments to the
overriding royalties so paid required by the 50% of net
operating revenue limitation set forth above shall be based
on accrued expenses in accordance with generally accepted
accounting principles adjusted to actual expenses in
succeeding months and as consistently applied. Resulting
adjustments to the 25% overriding royalty interest payment
shall be made during such succeeding month or by direct
payment (after confirmation of the appropriate adjustments)
to the party due such payment.

3.3 OVERRIDING ROYALTY INTEREST AND FINAL PAYMENT - EXCHANGE.

3.3.1 This Section 3.3 shall apply only if Seller elects to effect
a tax-deferred exchange as provided in Section ?.

3.3.2 After a date twenty (20) years from the date of first oil
production from or allocable to the Segregated Lease,
Seller's Production Payment as provided for in Section ?
above shall convert to an overriding royalty of 25% of the
value of oil and gas production thereafter produced and saved
or used from or allocable to the Segregated Lease. Such
conversion shall be set forth in an instrument similar in
form and substance to that attached hereto as Exhibit "F-4."
Notwithstanding anything foregoing in this Section 3.3 to the
contrary, said overriding royalty shall be calculated,
determined and paid on the same volumes of production on
which the lessor's royalty is calculated, determined and
paid; provided, this 25% overriding royalty due in any one
month shall never exceed 50% of the "net operating revenue"
for such month. For purposes of this Section ?, "net
operating revenue" is defined as gross value realized by
the Buyer on production saved and sold or used in the
calendar month, less the lessor's royalty and normal
operating expenses as outlined in Exhibit 'E' attached
hereto (excluding major workover expenses (i.e., well work
requiring a drilling or workover rig), plugging and
abandoning costs, and other expenditures of a capital
nature).

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Said overriding royalty shall be calculated on the same basis
as the lessor's royalties as provided for in the
Segregated Lease and, based on such calculation, shall be
paid concurrently with payment of royalties under the lease
covering the Segregated Lease. Additionally, said overriding
royalty shall bear its proportionate share of present or
future severance, windfall profits, excise or similar taxes.
Any adjustments to the overriding royalties so paid required
by the 50% of net operating revenue limitation set forth
above shall be based on accrued expenses in accordance with
generally accepted accounting principles adjusted to actual
expenses in succeeding months and as consistently applied.
Resulting adjustments to the 25% overriding royalty interest
payment shall be made during such succeeding month or by
direct payment ( after confirmation of the appropriate
adjustments) to the party due such payment.

3.3.3 If, prior to a date twenty (20) years from the date of first
oil production from or allocable to the Segregated Lease, oil
production from or allocable to the Segregated Lease equals
or exceeds 36 million stock tank barrels, as measured at
Buyer's production facility platform located on or adjacent
to the Segregated Lease, then Section 3.3.2 shall be
inapplicable, and Section 3.3.4 shall apply .

3.3.4 After cumulative oil production from or allocable to the
Segregated Lease produced, saved or used equals or exceeds
36 million stock tank barrels of oil, measured at Buyer's
production facility platform located on or adjacent to the
Segregated Lease (the ability to produce and save such
volumes of oil not being guaranteed by Buyer, and the date
of such point in time being referred to as the "Final Payment
Determination Date"), Seller's Production Payment or
overriding royalty, as applicable, shall terminate, and in
lieu thereof the "Final Payment," as defined hereafter, from
Buyer to Seller shall be due. Within thirty (30) days after
the Final Payment Determination Date, the parties hereto
shall meet and agree on the total cumulative recoverable oil
reserves ("Recoverable Reserves") which will be produced and
saved from or attributable to the Segregated Lease during its
economically productive life. If the parties cannot agree on
the Recoverable Reserves within ten (10) days after their
initial meeting on the matter, then DeGolyer and MacNaughton,
or another mutually acceptable consultant, shall conclusively
determine such Recoverable Reserves, with Seller and Buyer
equally sharing the fees and expenses of such determination.
Following determination of Recoverable Reserves, the parties
shall determine Seller's "Final Payment" due from Buyer. The
Final Payment shall be calculated as set forth in Exhibit
"G," attached hereto and made a part hereof. Once the Final
Payment has been made by Buyer to Seller, Seller shall have
no further interest in the Segregated Lease or the production
therefrom.

3.4 MANNER OF DEVELOPMENT AND PRODUCTION. The parties recognize the
unique nature, risks and rewards of the simultaneous exploitation
of sulphur and oil and gas reserves from the same geologic trap.
Buyer shall have the exclusive right to determine the manner of
development and production of the Segregated Lease and Buyer's
sulphur lease.

4. TAXES

PAYMENT OF TAXES. All ad valorem, property, and other similar forms of
taxes for 1990 allocable to the Assets, which have been paid by Seller
or which have accrued on or before the Closing, shall be prorated
between Seller and Buyer as of the Closing. Buyer shall be responsible
for all oil and gas production taxes, and any other similar taxes
applicable to oil and gas production occurring on and after the Closing,
except as otherwise provided for in this Agreement. Buyer shall be
responsible for all sales, use and similar taxes arising out of the sale
of the Assets. Buyer shall provide Seller with an offshore exemption
certificate or any other documentation if required under applicable law.
Buyer shall hold harmless and shall indemnify Seller for any sales or
use taxes

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<PAGE>

assessed against Seller by any taxing authority in respect of this sale,
including the amounts of any penalties, interest and attorneys' fees.

The parties expect that this purchase and sale will constitute an
isolated or occasional sale and will not be subject to sales or use tax
with any of the taxing authorities having jurisdiction over this
transaction, and as such, no sales tax will be collected by Seller from
Buyer at the date of Closing. Seller agrees to cooperate with Buyer in
demonstrating that the requirements for an isolated or occasional sale
or any other sales tax exemption have been met.

5. REPRESENTATIONS AND WARRANTIES

5.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants:

5.1.1 Seller is a corporation duly organized and validly existing,
in good standing, under the laws of the Commonwealth of
Pennsylvania. Seller has the corporate power and authority to
own its property and to carry on its business as now
conducted and to enter into and to carry out the terms of
this Agreement.

5.1.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on
behalf of Seller and Seller is not subject to any charter,
by-law, lien, or encumbrance of any kind, agreement,
instrument, order, or decree of any court or governmental
body (other than any governmental approval required) which
would prevent consummation of the transactions contemplated
by this Agreement.

5.1.3 The Segregated Lease is not subject to any preferential right
to purchase or right of first refusal in favor of any third
party.

5.1.4 Seller's operations on the Segregated Lease have been
conducted as a prudent operator and in accord with all
applicable rules or regulations of governmental bodies.

5.1.5 Seller has the right to assign the Physical Assets, except as
to contract rights of which it has previously advised Buyer.

5.1.6 Seller has incurred no liability, contingent or otherwise,
for brokers' or finders' fees in respect of this transaction
for which Buyer shall have any responsibility whatsoever.

5.1.7 No suit, action or other proceeding is pending or threatened
before any court or governmental agency which might result in
impairment or loss of Seller's title to any part of the
Assets or the value thereof or which might hinder or impede
the operation of the Assets, and Seller shall promptly
notify Buyer of any such proceeding arising or threatened
prior to the Closing.

5.1.8 Seller shall use its best efforts to take or cause to be
taken all such actions as may be necessary and advisable to
consummate and make effective the sale of the Assets and
the other transactions contemplated by this Agreement and
to assure that as of the date of the Closing it will not be
under any material corporate, legal or contractual
restriction that would prohibit or delay the timely
consummation of such transactions.

5.1.9 The assignment of the Segregated Lease shall be made without
any warranty of title of any kind, express or implied,
except that Seller shall warrant and defend good and
defensible title to the Segregated Lease unto Buyer against
every person whomsoever lawfully claiming or to claim the
Segregated Lease, or a portion thereof by, through or under
Seller, but not

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<PAGE>

otherwise, and such assignment shall be made with full
substitution and subrogation of Buyer in and to all covenants
and warranties by others heretofore given.

5.1.10 Seller shall warrant title to the Physical Assets solely to
the extent delivery and acceptance (actual or constructive)
of any such Physical Assets by Seller have occurred, and to
the extent Seller has rights and entitlements to receive
Physical Assets under the existing service contracts and
purchase orders pertinent to such Physical Assets.

EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PHYSICAL ASSETS
ARE TO BE SOLD AS IS, AND SELLER MAKES NO WARRANTY, EXPRESS OR
IMPLIED IN FACT OR BY LAW WHETHER OF OPERATING CONDITION, SAFETY,
COMPLIANCE WITH GOVERNMENT REGULATIONS, MERCHANTABILITY, FITNESS FOR
ANY PARTICULAR PURPOSES, CONDITION OR OTHERWISE, CONCERNING ANY OF
THE PHYSICAL ASSETS. ALL WELLS, PERSONAL PROPERTY, MACHINERY,
EQUIPMENT AND FACILITIES THEREIN, THEREON AND APPURTENANT THERETO
ARE TO BE CONVEYED BY SELLER AND ACCEPTED BY BUYER PRECISELY AND
ONLY "AS IS, WHERE IS." SELLER DOES NOT WARRANT THE PHYSICAL ASSETS
FREE FROM REDHIBITORY VICES OR DEFECTS.

5.2 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants:

5.2.1 Freeport is a limited partnership validly existing, in good
standing, under the laws of the State of Delaware and has the
power and authority to own its property and to carry on its
business as now conducted and to enter into and to carry out
the terms of this Agreement. Freeport Administrative
Managing General Partner is Freeport-McMoRan Inc., a
corporation validly existing, in good standing, under the
laws of the State of Delaware, and has the power and
authority, by virtue of its articles of incorporation,
by-laws, articles of partnership or other applicable
documents, to enter into this Agreement on behalf of
Freeport.

5.2.2 The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been duly authorized by all necessary partnership or
corporate action on behalf of Buyer and Buyer is not
subject to any articles, charter, by-law, lien or
encumbrance of any kind, agreement, instrument, order or
decree of any court or governmental body which would
prevent consummation of the actions contemplated by this
Agreement.

5.2.3 Buyer is in all respects qualified to own and operate the
Segregated Lease under applicable laws, rules, regulations
and order of any governmental body or agency having
jurisdiction.

5.2.4 Buyer is not a party to, or in any way obligated under, nor
does Buyer have any knowledge of any contract or outstanding
claim for the payment of any brokers or finders fee in
connection with the origin, negotiation, execution, or
performance of this Agreement.

5.2.5 Buyer shall be fully responsible for compliance with all
applicable laws, ordinances, rules and regulations and shall
promptly obtain and maintain all permits required by public
authorities in connection with the Assets purchased.

5.2.6 Buyer has made or arranged for others to make an inspection
of the Assets. Subject to Seller's foregoing representations
and warranties, Buyer accepts all Physical Assets in "as
is and where is" condition, with an express acceptance and
understanding of the representations and disclaimers
contained herein.

5.2.7 Buyer acknowledges that the Physical Assets have been used or
planned for use for oil and gas drilling and producing
operations, related oil field operations and possibly the
storage

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and disposal of waste materials incidental to or occurring
in connection with such operations, and that Buyer has
entered into this Agreement on the basis of Buyer's own
investigation of the physical condition of the Physical
Assets. Buyer hereby agrees to assume full responsibility
for compliance with all obligations or regulations concerning
all of such conditions, known or unknown, and further agrees
to indemnify Seller for same.

6. ADDITIONAL COVENANTS

6.1 APPROVALS AND CONSENTS.

6.1.1 FORM OF TITLE OF ASSIGNED LEASEHOLD RIGHTS. The transfer and
assignment of the Segregated Lease, in the manner intended by
Seller and Buyer hereunder, are subject to the approval by
the Minerals Management Service ("MMS"), United States
Department of the Interior. It is the intent and desire of
the parties that the Segregated Lease will be effectively
segregated by the MMS from the Retained Lease, it being
contemplated by Seller and Buyer that the Segregated Lease
and Retained Lease will become separate and distinct
leases and that the anticipated segregation will be
approved by the appropriate officer of the MMS
simultaneously with, and effective as of the Closing.
Seller and Buyer shall work together to obtain such
approvals as appropriate, and will attempt to obtain
concurrence in such segregation from the Secretary of the
Interior ("Secretary"); provided, however, that such
approval by the Secretary shall not be a condition
precedent to Closing, but rather a condition subsequent to
which Section 6.1.3 shall apply if such Secretary's
approval is not granted. Seller shall execute and deliver
to Buyer such instruments, subject to the provisions of
this Agreement, as may be required by the MMS to induce
the MMS to segregate the Segregated Lease. It is the
intent of the parties hereto that Seller shall retain no
obligation or responsibility to operate the Segregated
Lease after same has been assigned to Buyer, that Seller
shall execute any and all necessary Designations of
Operator to a company designated by Buyer and acceptable
to the parties; and that such Designations of Operator
shall be approved by the appropriate officer of the MMS
simultaneously with, and effective as of, the Closing.

6.1.2 DISAPPROVAL BY MMS. If the MMS will not, or does not,
approve the segregation of the Segregated Lease from the
Retained Lean as contemplated in Section 6.1.1, after
Seller's and Buyer's good faith attempts to obtain such
approval, the parties shall meet and determine whether an
alternative means can be found which would provide Buyer
with the intended rights in the Segregated Lease, as
defined herein, and be acceptable in form and effect to
Seller, Buyer and the MMS under its delegated authority.
If an alternative which is acceptable to Seller, Buyer and
the MMS cannot be found to the contemplated transfer as
set forth in Section 6.1.1, within six (6) months after
the rejection by the MMS of the contemplated segregating
assignment and transfer of the Segregated Lease, this
Agreement will terminate without liability or obligation
on the part of Seller or Buyer, except for (a) the
obligation of Buyer to reassign the Segregated Lease to
Seller, (b) the obligation of the Seller to return the
purchase price to Buyer, and (c) other settlement of
accounts provided for herein, or necessary and appropriate
under the circumstances.

6.1.3 DISAPPROVAL BY SECRETARY. If the MMS approves the
segregation of the Segregated Lease from the Retained
Lease as contemplated in Section 6.1.1, and the Secretary
does not approve such segregation, after Seller's and
Buyer's good faith attempts to obtain such approval, then
at Buyer's request the parties shall meet and determine
(1) whether the transfer instruments theretofore executed,
as interpreted by the Secretary, effect a form of transfer
and assignment which is acceptable to the parties under
the circumstances, or (2) whether additional documents or
agreements need be executed to effect the intended
transfer more perfectly, or (3) whether an alternative
means can be found which would provide

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Buyer with the intended rights in the Segregated Lease, as
defined herein, and be acceptable in form and effect to
Seller, Buyer and the applicable governmental authority
(i.e., the MMS or the Secretary). If an alternative which
is acceptable to Seller, Buyer and the applicable
governmental authority cannot be found to the contemplated
transfer as set forth in Section 6.1.1, within six (6)
months after the rejection by the Secretary of the
contemplated segregating assignment and transfer of the
Segregated Lease, this Agreement will terminate without
liability or obligation on the part of Seller or Buyer,
except for (a) the obligation of Buyer to reassign the
Segregated Lease to Seller, (b) the obligation of the
Seller to return the purchase price to Buyer, and (c)
other settlement of accounts provided for herein, or
necessary and appropriate under the circumstances.

6.2 SERVICE CONTRACTS, PURCHASE ORDERS. Certain of the service contracts
and purchase orders entered into by Seller, with respect to the
Physical Assets listed in Exhibit B, are not assignable by Seller;
consequently, Buyer and Seller shall work together in good faith to
the end that Buyer receive the benefit of such service contracts and
purchase orders, including all warranties, to the extent that such
affect the materials, equipment and services to be received by Buyer
pursuant hereto; provided, however, it is not the intent hereof that
Seller shall undertake any obligation or warranty in lieu of the
obligations of any vendor or contractor. Seller and Buyer shall
execute appropriate documentation required by either vendors,
contractors or Seller to effectuate a substitution of Buyer for
Seller under such service contracts and purchase orders.

6.3 OPERATIONS PRIOR TO CLOSING. After the date of this Agreement and
prior to the Closing, Seller shall use and maintain the Assets in
substantially the same manner in which they have been used and
maintained prior to this Agreement The parties have previously
agreed and by this Agreement confirm and establish that as of
February 19, 1990, all obligations, liabilities, duties, rights and
benefits associated with the physical Assets and their existing
purchase orders and service contracts as set forth in Exhibit "B"
shall be assumed by and same shall inure to the benefit of Buyer The
parties further agree that, if for any reason the Closing under this
Agreement is not consummated, they will use their good faith efforts
to release, exchange and balance the costs incurred by the parties
as a result of the allocation of costs before and after such date,
by payment to Buyer or Seller (as required), within sixty (60) days
following the termination of this Agreement, of an agreed-upon
amount of money, along with execution and delivery of such documents
as are required.

6.4 SELLER'S OPERATIONS AFTER CLOSING. From and after the Closing, Seller
shall not conduct thereafter any oil and gas exploration and
development operations on Block 299, Main Pass Area, by drilling or
producing through the horizons and formations from the surface down
to a subsea depth of 1900 feet on the Segregated Lease. Accordingly,
unless otherwise consented to or waived by Buyer, which consent
shall not be unreasonably withheld, Seller shall conduct all oil and
gas exploration, development and production operations on the
Retained Lease below the subsea depth of 1900 feet under the
Segregated Lease by drilling directional wells from surface
locations totally outside the area covered by the Segregated Lease
to bottomhole locations below the subsea depth of 1900 feet under
the Segregated Lease. Such wells shall not at any point intersect
the Segregated Lease. If through inadvertence any portion of a well
drilled by Seller does penetrate the Segregated Lease at any depth,
then upon discovery of such penetration Seller shall advise Buyer in
writing, and unless waived by Buyer, Seller shall sidetrack such
well out of the Segregated Lease and into the Retained Lease. Waiver
by Buyer of such sidetracking shall not be construed a waiver of
Seller's indemnity hereunder, but an attempt by Buyer to mitigate
Seller's damages.

6.5 ACCESS TO ASSETS. At all times prior to the Closing, if this Agreement
shall not have first been terminated, Buyer and the employees and
agents of Buyer shall have access to the Assets at Buyer's sole
cost, risk and expense, and during normal business hours. Seller
shall have the right to regulate reasonably the hours and frequency
of Buyer's access to the Assets, so as not to interfere unreasonably
with Seller's other business and so as to allow Seller to have a
representative present

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(at Seller's option) during Buyer's access. Buyer shall give Seller
at least forty-eight (48) hours' notice, during normal business hours,
of Buyer's desire to access the Assets.

6.6 CASUALTY LOSS. In the event any Physical Asset, including fixtures and
improvements, to be sold hereunder is damaged by fire or other calamity
before Closing, Seller may repair the damage at its cost or, at its
sole option, either reduce the purchase price by the cost of the
damage or withdraw the damaged Physical Asset from the sale and
reduce the purchase price by the undamaged value thereof.

7. CONDITIONS PRECEDENT TO CLOSING

7.1 SELLER'S CONDITIONS PRECEDENT. The obligations of Seller to consummate
the transactions contemplated by this Agreement are subject to each of
the following conditions:

7.1.1 Buyer shall have performed and complied with all terms of
this Agreement required to be performed or complied with by
Buyer prior to Closing.

7.1.2 No action or proceeding by or before any governmental
authority shall have been instituted or threatened (and
not subsequently dismissed, settled or otherwise
terminated) which might restrain, prohibit or invalidate
any of the transactions contemplated by this Agreement,
other than an action or proceeding instituted or
threatened by Seller or any of its affiliates.

7.1.3 Seller shall have executed appropriate amendments to the
existing federal unit agreement and unit operating
agreement to delete and exclude the Segregated Lease from
such unit agreement and unit operating agreement. It is
anticipated that such amendments will be approved by the
MMS simultaneously with, and effective as of the Closing.
The parties intend and desire that the Segregated Lease
will be owned by Buyer, subject to the terms and
provisions of this Agreement, but not subject to the
existing federal unit agreement or any existing operating
agreement, and that Seller shall retain no obligation or
responsibility to operate the Segregated Lease.

7.1.4 Pursuant to application therefor by Buyer, and simultaneously
with segregation of the Segregated Lease from the Retained
Lease, the MMS shall have approved a Suspension of
Production or a Suspension of Operations, such that the
Segregated Lease can be maintained in force and effect for
a period of at least two (2) years, or until actual
production of oil and/or gas can be established, whichever
occurs first.

7.1.5 All necessary parties shall have executed instruments, in
forms substantially similar to those attached as Exhibits
"F-1," "F-2," either "F-3" or "F-4," and "F-5," whereby
Seller transfers its right, title and interest in the
Assets to Buyer, and whereby Buyer assigns to Seller, the
interests contemplated in Sections 3.1.1, 3.2 and/or 3.3.
Further, if required by any vendor, contractor or either
party hereto, all necessary parties shall execute separate
Bills of Sale with respect to Physical Assets.

7.2 BUYER'S CONDITIONS PRECEDENT. The obligations of Buyer to consummate
the transactions contemplated by this Agreement are subject to each of
the following conditions:

7.2.1 Seller shall have performed and complied with all terms of
this Agreement required to be performed or complied with by
Seller prior to Closing.

7.2.2 Buyer and Chevron Pipe Line Company shall have reached a
mutually satisfactory agreement with regard to transportation
of the oil produced from or allocable to the Segregated
Lease.

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7.2.3 No action or proceeding by or before any governmental
authority shall have been instituted or threatened (and not
subsequently dismissed, settled, or otherwise terminated)
which might restrain, prohibit or invalidate any of the
transactions contemplated by this Agreement, other than an
action or proceeding instituted or threatened by Buyer or any
of its affiliates.

7.2.4 All necessary parties shall have executed instruments, in
forms substantially similar to those attached as Exhibits
"F-1," "F-2," either "F-3" or "F-4," and "F-5," whereby
Seller transfers its right, title and interest in the
Assets to Buyer, and whereby Buyer assigns to Seller, the
interests contemplated in Sections 3.1.1, 3.2 and/or 3.3.
Further, if required by any vendor, contractor or either
party hereto, all necessary parties shall execute separate
Bills of Sale with respect to Physical Assets.

7.3 EFFECTS OF TAX-DEFERRED EXCHANGE. If Seller elects to effect a
tax-deferred exchange pursuant to Section 1.3, Buyer and Seller agree
to cooperate and execute additional assignments as prudently
required to effect the exchange, and in such event Seller shall
guarantee the performance of any intermediary corporation used as a
part of such exchange transaction. The parties contemplate execution
of a direct assignment from Seller to Buyer in the form attached
hereto as Exhibit "F-1", at the direction of the intermediary
corporation as set forth in Exhibit "F-5," which assignment shall be
filed for approval by the MMS and the Secretary of the Interior as
set forth in Section 6.1.1.

8. MISCELLANEOUS

8.1 PAYMENT OF EXPENSES AND FEES. Buyer and Seller shall each bear its own
costs and expenses, including but not limited to attorney's fees
incurred in connection with the transactions contemplated in this
Agreement; provided, however; Buyer shall pay all recording fees or
transfer taxes in connection with the recording of any instrument of
transfer of Assets from Seller to Buyer hereunder.

8.2 NORM. Any assignment of the Physical Assets shall contain the
following provision:

8.2.1 It is expressly recognized and acknowledged that naturally
occurring radioactive material ("NORM") is normally
associated with oil and gas producing operations, and as a
result the Physical Assets transferred herein may be
contaminated by NORM in that certain of the Physical
Assets have previously been used in oil and gas producing
operations. Accordingly, Buyer shall comply with
applicable federal and applicable state laws and
regulations governing NORM and governing Physical Assets
contaminated by or containing NORM.

8.2.2 The Physical Assets herein transferred which have previously
been used in oil and gas producing operations shall be
used only in connection with oil and gas producing
activities, and shall not be subsequently transferred for
unrestricted use unless the concentrations of NORM
associated therewith are below the levels specified as
allowable for unrestricted transfer as set forth in the
Louisiana Radiation Regulations and subsequent amendments
thereto, as adopted by the Louisiana Department of
Environmental Quality.

8.2.3 Buyer shall comply with all provisions of the Louisiana
Radiation Regulations and all subsequent amendments
thereto to the extent that the regulations are applicable
to the Physical Assets herein transferred.

8.2.4 Buyer shall include the provisions of this Section 8.2 in any
subsequent sale or assignment of the Physical Assets herein
transferred which have previously been used in oil and gas
producing operations.

8.3 TRANSPORTATION OF OIL. Subject to partial reimbursement by Seller of
certain costs as provided herein, and except as may be negotiated
between Buyer and the purchaser of the oil produced and saved from

11
<PAGE>

the Segregated Lease, Buyer shall be responsible for all costs
associated with transporting oil from or attributable to the
Segregated Lease to the designated sales point. If such oil is
transported through the common carrier pipeline system owned and
operated by Chevron Pipe Line Company ("CPL") from Main Pass 299B to
Main Pass 69 to the outermost flange of the Empire Terminal located
in Plaquemines Parish, Louisiana, then Buyer or the purchaser of
such oil will bear any and all costs and expenses associated with
the metering and transportation of production through such system to
the outermost flange of the Empire Terminal, including but not
limited to the following:

8.3.1 Costs of pipeline installation, tie-in and maintenance
associated with Buyer's connection of its production to
Chevron Pipe Line Company's facilities on Seller's Main
Pass 299B platform, it being understood and agreed that
any plans or drawings for such installation or tie-in, and
the actual work ultimately performed, shall be subject to
Seller's prior review and approval, and subject to such
further notice, oversight and considerations of safety as
customarily apply under such circumstances; and

8.3.2 Transportation charges and terminal exit fees associated with
transport of oil from or attributable to the Segregated Lease
through Chevron Pipe Line Company's common carrier pipeline
system from Main Pass 299B platform to Main Pass 69 into and
through Chevron Pipe Line Company's Empire Terminal. Seller,
however, agrees to reimburse Buyer for a certain portion of
transportation charges and exit fees, in the manner and in
the amounts set forth in Exhibit "H" attached hereto.

The parties understand and agree that Buyer, separately and
independently of this transaction, shall make its own arrangements
with Chevron Pipe Line Company for metering, transportation and
delivery of production through the said system and for tying into
said system.

8.4 PIPELINE ACCESS.

8.4.1 For purposes of this Section 8.4, the terms "sweet crude oil"
and "sour crude oil" are used to describe oil produced
from the Retained Lease and from the Segregated Lease,
respectively The parties do not intend to indicate any
particular characteristics of either oil, the terms being
merely a convenient means of relative comparison and
reference.

8.4.2 If requested by Chevron Pipe Line Company ("CPL"), Seller
will notify CPL in writing that Seller has no objection to
CPL's use of the existing 10-inch O.D. pipeline from Main
Pass 299B platform to Main Pass 69 for transportation of
the sour crude oil to be produced from the Segregated
Lease. Further, Seller agrees to provide Buyer with such
platform space on Main Pass 299B platform as is reasonably
required for the tie-in of production to CPL's pipeline
system, subject to such mutually agreeable terms and
conditions as customarily apply under such circumstances.

8.4.3 The parties contemplate that sweet crude oil produced and
saved from the Retained Lease and other leases in the
area, and sour crude oil produced and saved from the
Segregated Lease, will be transported by CPL in separate
pipelines from platforms on Main Pass Block 299 to Main
Pass 69, and that the sour crude oil will be "batched"
from Main Pass 69 to the Empire Terminal. The parties
further understand and acknowledge CPL's role in the
determination of which facilities shall be used for
transportation of crude oil.

8.5 CALL ON OIL. From time to time and at any time, Seller shall have the
option, but not the obligation, to purchase or designate a purchaser
financially acceptable to Buyer of the oil produced from or
attributable to the Segregated Lease. If purchased by Seller or a
designee, such crude oil would be delivered to a sales point
designated by Seller or its designee, which sales point shall be on
CPL's system and shall never be beyond the outermost flange of CPL's
Empire Terminal located in

12
<PAGE>

Plaquemines Parish, Louisiana, unless the parties mutually agree
otherwise. The price to be paid to Buyer shall be the higher of (1)
fair market value for oil of like gravity and quality, or (2) the
price offered to Buyer from a bona fide third party in a written
offer by a third party, non-affiliated purchaser ready and able to
purchase, which offer Buyer is willing to accept, with comparable
terms and conditions. Buyer shall notify Seller in writing of any
such bona fide offer, giving the terms and conditions of such
acceptable offer. Upon receiving such notice, Seller shall have ten
(10) days to elect to purchase such oil on the same terms and
conditions as contained in the bona fide offer. Further, Seller and
Buyer agree that in the event Buyer receives at any time and from
time to time such a bona fide offer from a third party to purchase
Buyer's crude oil at a price higher than that otherwise provided for
pursuant to this Section 8.5, Buyer may furnish Seller a copy of
such offer, and Seller shall have ten (10) days from receipt of such
offer either to agree to pay said higher price or to release Buyer's
oil production for sale to such third party in accordance with such
offer, including the term thereof. In no event, however, shall
Seller be obligated to discontinue purchase of such crude oil sooner
than the first day of the month on or following the thirtieth (30th)
day following receipt of such bona fide offer. If at any time and
from time to time Seller is purchasing such crude oil hereunder, the
purchase of such crude oil by Seller shall be terminable at Seller's
option with at least ninety (90) days' prior written notice to
Buyer, such termination to be effective on the first day of the
calendar month on or following the end of such 90-day notice period,
or upon the expiration of the term theretofore offered by a third
party and matched by Seller, whichever is later: If purchased by
Seller or a designee, Buyer shall be obligated, at its sole cost and
expense, to deliver the oil to Seller at standard sour crude
pipeline quality, limited to three percent (3%) sulphur by weight
and fifty parts per million (50 ppm) hydrogen sulphide.

8.6 ANTITRUST REVIEW. Seller and Buyer recognize that they have been
advised that the Federal Trade Commission has granted an early
termination of the thirty (30) day waiting period required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Each party
hereto acknowledges that it has satisfied itself that its
obligations under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 have been fulfilled.

8.7 GAS CONTRACT. Gas production from the Segregated Lease has been
permanently released by Southern Natural Gas Company ("Southern") from
an Omnibus Contract entered into between Southern and Seller
effective January 1, 1988. The Omnibus Contract covered gas
previously sold to Southern under long-term interstate contract
which were terminated and abandoned under FERC Order No. 490.

8.8 F.E.R.C. 500. Any assignment of the Segregated Lease shall be subject
to the following provision:

It is understood that interstate pipelines may refuse to transport
under 18 C.F.R. Part 284 gas produced from the properties hereby
assigned unless Seller agrees to offer take-or-pay or take-and-pay
credit to such pipelines, and the parties hereby agree that Seller
may withhold such an offer at its sole discretion, even if the
result is to completely bar Buyer's gas from the interests hereby
assigned from open access transportation in such pipelines.
Notwithstanding the foregoing, Seller agrees to execute offers of
credit necessary to render the assigned gas eligible for open access
transportation if Seller determines, in its sole discretion, that
such gas is exempt from crediting pursuant to FERC rules and
regulations or that Seller can otherwise execute such offers of
credit without risk of adverse economic consequences to Seller. Any
offers of credit executed by Seller pursuant to this provision shall
be limited in scope or term as Seller deems necessary.

8.9 PROVISION OF DATA. Seller shall have the right to receive from Buyer,
at no charge to Seller, all basic data and test results obtained in
the course of drilling, testing, evaluating and producing on, in or
under the Segregated Lease, to which no proprietary interpretive
notes, marks or comments have been added and exclusive of any
proprietary extrapolations derived therefrom ("Data"). Seller shall
furnish Buyer, at no charge to Buyer, any such Data obtained from
Seller's test well drilled on and in the

13
<PAGE>

Segregated Lease, which is reasonably necessary to qualify said well
as producible under 30 CFR Section 250.11. All such Data which is
provided by one party to the other party pursuant to the provisions
of this Section 8.9 shall be maintained by the receiving party on a
confidential basis in accordance with the provision of Section 8.18.

8.10 LOCATION AND/OR RELOCATION OF FLOWLINES OR FACILITIES.

8.10.1 Should any of Buyer's operations require or reasonably
necessitate the removal, replacement, modification or
relocation of any presently existing flowlines or
facilities owned and operated by Seller or an affiliate of
Seller; including but not limited to CPL, then such
removal, replacement, modification or relocation shall be
accomplished at Buyer's sole cost, risk and expense.

8.10.2 Seller shall not locate any new flowlines or facilities on
the surface area extent encompassed by the Segregated
Lease without Buyer's prior written consent.

8.10.3 It is understood that it will be necessary for Buyer to
install flowlines and facilities on the surface area
encompassed by the Retained Lease. Prior to installation
of any such flowlines or facilities, Buyer shall consult
with Seller in an effort to minimize interference with
Seller's current and future operations. Seller shall not
unreasonably withhold consent to such installations, it
being understood that final approval for any such
installations is vested in the MMS.

8.11 PUBLICITY. Except as modified by Section 8.18, Seller and Buyer shall
jointly coordinate the timing and substance of any press releases or
publicity concerning the transactions contemplated by this Agreement.

8.12 ASSIGNMENT. Buyer or Seller may not assign this Agreement or delegate
any duties hereunder without the prior written consent of the other,
which consent shall not be unreasonably withheld. Such assignment or
delegation shall not relieve the assigning party of liability for
the performance of its duties and obligations hereunder, and any
such assignment shall contain the express assumption by the assignee
of all duties and obligations incumbent on its assignor pursuant to
this Agreement, the performance of which such assignor guarantees.
The terms and conditions of this Agreement shall be real rights
attached to and appendages running with the interests in the
Segregated Lease and Physical Assets covered and affected by this
Agreement, and shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns, and their
successors and assigns.

The following shall not be considered a violation of this Section 8.12:

8.12.1 The assignment by Freeport of an undivided one-fourth (1/4th)
interest in this Agreement to IMC Fertilizer, Inc., a
Delaware corporation ("IMC"), and the assignment by
Freeport of an undivided one-sixth (1/6th) interest in
this Agreement to Felmont Oil Corporation, a Delaware
corporation ("Felmont"). In the event of such assignments,
Freeport, IMC and Felmont shall assume, solidarily with
each other, all obligations and liabilities provided for
in Section 2.2 hereof except as may be otherwise provided
with respect to Section 2.3 hereof and such parties,
severally and to the extent of their respective interests,
shall defend and indemnify Seller in accordance with the
provisions of Section 2.3 hereof.

8.12.2 The designation and appointment of Freeport as operator and
of Freeport-McMoRan Oil & Gas Company as acting operator.

8.12.3 The assignment by Buyer or Seller to an affiliate or
subsidiary, or the execution of a mortgage, deed of trust,
financing statement or other instrument for borrowing
purposes,

14
<PAGE>

provided that any such instrument for financing purposes
shall be subordinate to the terms and provisions of this
Agreement.

8.13 RIGHT TO AUDIT. Seller shall have the right to question the
appropriateness of the payments made to Seller by Buyer pursuant to
Section 3 hereof and of charges for partial reimbursement of
transportation costs incurred by Buyer pursuant to Section 8.3.2
hereof including without limitation the figures on which such
payments or charges were based, the amounts deducted therefrom, and
the calculation thereof. Seller shall have the right, either itself
or by an accounting firm of Seller's choosing, to audit Buyer's
books and records to confirm or question the correctness of such
payments or charges, together with subsequent adjustments thereto,
during normal business hours and with no less than thirty (30) days'
prior written notice to Buyer. It is provided, however, that any
payment, charge or adjustment shall be considered correct and
appropriate if not challenged by Seller in writing within two (2)
years after the date the payment or invoice for the charge was
received by Seller, or within two (2) years after Seller's receipt
of notice of a payment adjustment, as applicable. All statements and
records shall be maintained for two (2) years after payments have
been made.

Buyer shall have the right to audit Seller's books and records,
within the above time frame, to confirm the accuracy and
appropriateness of those costs estimated on Exhibit "B" and billed
to Buyer in accordance with Section 2.1.2 of this Agreement.

8.14 CONFLICT OF INTEREST. Buyer and Seller, for themselves and their
directors, employees and agents, acknowledge that they are familiar
with and will comply with each other's Conflict of Interest
policies. Each party shall promptly notify the other party of any
violation of this Section 8.14, and any consideration received by a
party as a result of such violation shall be paid over or credited
to the other party. Each party, or its designated representative(s),
may audit, for reasonable cause, any pertinent records of the other
party for the sole purpose of determining whether there has been
compliance with this Section 8.14.

8.15 TERM. This Agreement shall remain in force and effect for so long as
the Segregated Lease, or any extension, renewal or replacement
thereof remains in effect, and as long thereafter as necessary to
achieve full performance of all obligations assumed by the Buyer and
Seller hereunder.

8.16 ENTIRE AGREEMENT. As used herein, the term "this Agreement" includes
not only this Asset Sale Agreement but also all exhibits referred to
herein, which exhibits are hereby incorporated by reference for all
purposes. This Agreement constitutes the entire agreement between
Seller and Buyer with respect to the transactions contemplated
herein, and supersedes all prior oral or written agreements,
commitments, understandings, or information otherwise furnished by
Seller to Buyer with respect to such matters; provided, however,
that certain Agreement of Indemnity dated as. of the date of
Closing, by and between Chevron U.S.A. Inc. and Freeport-McMoRan
Inc. is not merged herein and survives the execution hereof. No
amendment shall be binding unless in writing and signed by
representatives of both parties. Headings used in this Agreement are
only for convenience of reference and shall not be used to define
the meaning of any provision. This Agreement is for the benefit of
Seller and Buyer only and not for the benefit of any other party.

8.17 SURVIVAL. The terms and provisions of this Agreement shall survive any
assignment, pledge or delegation of any right, duty or obligation
covered and affected hereby.

8.18 CONFIDENTIALITY . The contents of this Agreement, and any notes,
summaries, compilations, analyses or other material derived from
this Agreement, are confidential, and neither party shall release
any of such contents, notes, summaries, compilations, analyses or
other material to a third party without first obtaining the express
written consent of the other party hereto, except that this
prohibition shall not apply to disclosures:

15
<PAGE>

8.18.1 To any parent corporation, any subsidiary of any parent
corporation of or any subsidiary of either party hereto, or
to any banking, accounting, engineering or other
consultant firms to any party hereto, provided that any
such recipient shall have first agreed in writing to be
bound by the provisions of this Section 8.18;

8.18.2 Required by law (including the rules and regulations of the
appropriate stock exchange);

8.18.3 Of information that is already in the public domain through
no fault of the party then disclosing it;

8.18.4 Of information which either Buyer or Seller may have or
hereafter lawfully may obtain from any party or parties who
are legally entitled to such data.

The parties furthermore agree that a party may disclose any of such
information to courts, governmental bodies or agencies or stock
exchanges if the disclosing party believes in good faith that such
disclosure is required by applicable law, regulation or regulatory
body policy. The parties acknowledge that the press release or
publicity under Section 8.11 will render this Section 8.18 moot as
to the content thereof.

8.19 NOTICES. All notices and consents to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered
personally telexed with receipt acknowledged, mailed by registered
mail, or delivered by a recognized commercial courier to the party
at the address set forth on the first page of this Agreement or such
other address as any party shall have designated by ten days' notice
to the other parties.

8.20 GOVERNING LAW. This Agreement shall be governed by the law of the State
of Louisiana, without regard to rules concerning conflicts of law.

IN WITNESS WHEREOF, this Agreement is executed on the date first above
written.

WITNESSES: CHEVRON U.S.A. INC., Seller

/s/ Gordon R. Cain By: /s/ F. Robin
- ----------------------------------- --------------------------
F. Robin
/s/ Brian P. Roberts Regional Vice-President
- -----------------------------------

FREEPORT-McMoRan RESOURCE PARTNERS,
LIMITED PARTNERSHIP, Buyer

/s/ Robert M. Wohleber By: /s/ Rene L. Latiolais
- ----------------------------------- --------------------------
Rene L. Latiolais
/s/ John F. Gateshall Senior Vice-President
- -----------------------------------

16
<PAGE>

STATE OF LOUISIANA

PARISH OF ORLEANS

On this 2nd day of May, 1990, before me appeared F. ROBIN, to me
personally known, who being by me duly sworn, did say that he is the Regional
Vice-President of CHEVRON U.S.A. INC., a Pennsylvania corporation, and that
the seal affixed to said instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation by authority of its Board of Directors, and said appearer
acknowledged that he executed the same as the free act and deed of said
corporation.

IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.

/s/ signed but illegible
----------------------------------
Notary Public in and for
Orleans Parish, Louisiana

My Commission expires at death.

STATE OF LOUISIANA

PARISH OF ORLEANS

On this 2nd day of May, 1990, before me appeared RENE' L. LATIOLAIS, to
me personally known, who being by me duly sworn did say that he is the Senior
Vice-President of Freeport-McMoRan Inc., a Delaware corporation, as
Administrative Managing General Partner of FREEPORT-McMoRan RESOURCE
PARTNERS, LIMITED PARTNERSHIP, a Delaware limited partnership, and that the
foregoing instrument was signed on behalf of and as duly authorized by, said
limited partnership acting through the aforesaid corporation with the
authority of its Board of Directors, and said appearer acknowledged said
instrument to be the free act and deed of said partnership.

IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the
date hereinabove written.

/s/ Henry J. Berthelot
----------------------------------
Notary Public in and for
Jefferson Parish, Louisiana

My Commission expires at death.

<PAGE>

<TABLE>

<S> <C> <C>
UNITED STATES Office Serial number
DEPARTMENT OF THE INTERIOR NEW ORLEANS, LA OCS-G 9372
MINERALS MANAGEMENT SERVICED

Rental rate per
acre, or fraction
SULPHUR AND SALT LEASE OF Cash bonus thereof
SUBMERGED LANDS UNDER THE OUTER $ 3,401,757.00 $ 3.00 PER ACRE
CONTINENTAL SHELF LANDS ACT

THIS FORM DOES NOT CONSTITUTE AN INFORMATION COLLECTION AS
DEFINED BY 44 U.S.C. 3502 AND THEREFORE DOES NOT REQUIRE Minimum royalty rate
APPROVAL BY THE OFFICE OF MANAGEMENT AND BUDGET. per acre, or fraction
thereof Royalty rate
$ 3.00 12 1/2 PERCENT - SULPHUR
5 PERCENT - SALT TAKEN OFFSITE
</TABLE>

- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

This lease is effective as of May 1, 1988 (hereinafter called the "Effective
Date") and shall continue for an initial period of TEN years (hereinafter
called the "Initial Period") by and between the United States of America
(hereinafter called the "Lessor"), by the REGIONAL DIRECTOR, GULF OF MEXICO
OCS REGION, Minerals Management Service, its authorized officer, and

FREEPORT-MCMORAN RESOURCE PARTNERS, LIMITED PARTNERSHIP 58.33000%

IMC FERTILIZER, INC. 25.00000%

FELMONT OIL CORPORATION 16.67000%

(hereinafter called the "Lessee"). In consideration of any cash payment
heretofore made by the Lessee to the Lessor and in consideration of the
promises, terms, conditions, and covenants contained herein, including the
Stipulation(s) numbered 1 AND 3 attached hereto, the Lessee and Lessor agree
as follows:

SEC. 1. STATUTES AND REGULATIONS. This lease is issued pursuant to the
Outer Continental Shelf (OCS) Lands Act (43 U.S.C. 1331-1356, (1953)), as
amended, and the regulations issued thereunder (30 CFR Part 256). The lease
is issued subject to the Act; all regulations issued pursuant to the Act and
in existence upon the Effective Date of this lease; all regulations issued
pursuant to the statute in the future which provide for the prevention of
waste and conservation of the natural resources of the Outer Continental
Shelf and the protection of correlative rights therein; and all other
applicable statutes and regulations.

SEC. 2. RIGHTS OF LESSEE. The Lessor hereby grants and leases to the
Lessee the exclusive right and privilege to drill for, develop, and produce
sulphur and salt resources in the submerged lands of the Outer Continental
Shelf containing approximately 4,560.81 acres (hereinafter referred to as the
"leased area"), described as follows:

ALL OF BLOCK 299, MAIN PASS AREA, SOUTH AND EAST ADDITION, OCS LEASING MAP,
LOUISIANA MAP NO. 10A.

<PAGE>

These rights include:

(a) the nonexclusive right to conduct within the leased area geological
and geophysical exploration in accordance with applicable regulations;

(b) the nonexclusive right to drill water wells within the leased area,
unless the water is part of geopressured-geothermal and associated resources,
and to use the water produced therefrom for operations pursuant to the Act
free of cost, on the condition that the drilling is conducted in accordance
with procedures approved by the Director of the Minerals Management Service
or the Director's delegate (hereinafter called the "Director"); and

(c) the right to construct or erect and to maintain within the leased
area artificial islands, installations, and other devices permanently or
temporarily attached to the seabed and other works and structures necessary
to the full enjoyment of the lease, subject to compliance with applicable
laws and regulations.

SEC. 3. TERM. This lease shall continue from the Effective Date of the
lease for the Initial Period and so long thereafter as sulphur and/or salt
are produced from the leased area in paying quantities, or drilling or well
reworking operations, as approved by the Lessor, are conducted thereon, or as
otherwise provided by regulations.

SEC. 4. RENTALS. The Lessee shall pay the Lessor, on or before the first
day of each lease year which commences prior to a discovery in paying
quantities of sulphur and/or salt on the leased area, a rental as shown on
the face hereof.

SEC. 5. MINIMUM ROYALTY. The Lessee shall pay the Lessor, at the
expiration of each lease year which commences after a discovery of sulphur
and/or salt in paying quantities, a minimum royalty as shown on the face
hereof or, if there is production, the difference between the actual royalty
required to be paid with respect to such lease year and the prescribed
minimum royalty if the actual royalty paid is less than the minimum royalty.

SEC. 6. ROYALTY ON PRODUCTION.

(a) The Lessee shall pay a fixed royalty as shown on the face hereof in
value of production saved, removed, or sold from the leased area. Any Lessee
is liable for royalty payments on sulphur and/or salt lost or wasted from a
lease site when such loss or waste is due to negligence on the part of the
operator of the lease, or due to the failure to comply with any rule or
regulation, order, or citation issued under the Act.

(b) The value of production for purposes of computing royalty on
production from this lease shall never be less than 5 percent of the gross
production or value of the sulphur at the mine. The value of production
shall be the estimated reasonable value of the production as determined by
the Lessor, due consideration being given to the highest price paid for a
part or for a majority of sulphur and/or salt of like quality in the same
general area, to the price received by the Lessee, to posted prices, and to
other relevant matters. Except when the Lessor, in its discretion, determines
not to consider special pricing relief from otherwise applicable Federal
regulatory requirements, the value of production for the purposes of
computing royalty shall not be deemed to be less than the gross proceeds
accruing to the Lessee from the sale thereof. in the absence of good reason
to the contrary, value computed on the basis of the highest price paid or
offered at the time of production in a fair and open market for the major
portion of like quality sulphur produced and sold from the field or area
where the leased area is situated will be considered to be a reasonable value.

(c) Royalties shall be due and payable by the last day of the next
month following the month in which the sulphur and/or salt is produced,
unless the Lessor prescribes a later date.

SEC. 7. PAYMENTS. The Lessee shall make all payments (rentals, royalties,
and any other payments required by this lease) to the Lessor by electronic
transfer of funds, check, draft on a solvent bank, or money order unless
otherwise provided by regulations or by direction of the Lessor. Rentals,
royalties, and any other payments required by this lease shall be made
payable to the Minerals Management Service and tendered to the Director.
Determinations made by the Lessor as to the amount of payment due shall be
presumed to be correct and paid as due.

SEC. 8. BONDS. The Lessee shall maintain at all times the bond(s) required
by regulation prior to the issuance of the lease and shall furnish such
additional security as may be required by the Lessor if, after operations
have begun, the Lessor deems such additional security to be necessary.

SEC. 9. PLANS. The Lessee shall conduct all operations on the leased area
in accordance with approved exploration plans and approved development and
production plans as are required by regulations. The Lessee may depart from
an approved plan only as provided by applicable regulations.

SEC. 10. PERFORMANCE. The Lessee shall comply with all regulations and
Orders. After due notice in writing, the Lessee shall drill such wells and
produce at such rates as the Lessor may require in order that the leased area
or any part thereof may be properly and timely developed and produced in
accordance with sound operating principles.

<PAGE>

SEC. 11. SAFETY REQUIREMENTS. The Lessee shall:

(a) maintain all places of employment within the leased area in
compliance with occupational safety and health standards and, in addition,
free from recognized hazards to employees of the Lessee or of any contractor
or subcontractor operating within the lease area;

(b) maintain all operation within the leased area in compliance with
regulations or orders intended to protect persons, property, and the
environment on the Outer Continental Shelf; and

(c) allow prompt access, at the site of any operation subject to safety
regulations, to any authorized Federal inspector and shall provide any
documents and records which are pertinent to occupational or public health,
safety, or environmental protection as may be requested.

SEC. 12. SUSPENSION AND CANCELLATION.

(a) The Lessor may suspend or cancel this lease pursuant to Section 5 of
the Act, and compensation shall be paid when provided by the Act.

(b) The lessor may, upon recommendation of the secretary of Defense,
during a state of war or national emergency declared by Congress or the
President of the United States, suspend operations under the lease, as
provided in section 12(c) of the Act, and just compensation shall be paid to
the Lessee for such suspension.

SEC. 13. INDEMNIFICATION. The Lessee shall indemnify the Lessor for, and
hold it harmless from, any claim, including claims for loss or damage to
property or injury to person caused by or resulting from any operation on the
leased area conducted by or on behalf of the Lessee. However, the Lessee
shall not be held responsible to the Lessor under this section for any loss,
damage, or injury caused by or resulting from:

(a) negligence of the Lessor other than the commission or omission of a
discretionary function or duty on the part of a Federal Agency whether or not
the discretion involved is abused; or

(b) the Lessee's compliance with an order or directive of the Lessor
against which an administrative appeal by the Lessee is filed before the
cause of action for the claim arises and is pursued diligently thereafter.

SEC. 14. PURCHASE OF PRODUCTION. In time of war or when the President of
the United States shall so prescribe, the Lessor shall have the right of
first refusal to purchase at the market price all or any portion of the
sulphur and/or salt produced from the leased area, as provided in Section
12(b) of the Act.

SEC. 15. EQUAL OPPORTUNITY CLAUSE. During the performance of this lease,
the Lessee shall fully comply with paragraphs (1) through (7) of section 202
of Executive Order 11246, as amended (reprinted in 41 CFR 60-1.4(a)), and the
implementing regulations which are for the purpose of preventing employment
discrimination against persons on the basis of race, color, religion, sex, or
national origin. paragraphs (1) through (7) of section 202 of Executive
Order 11246, as amended, are incorporated in this lease by reference.

SEC. 16. CERTIFICATION OF NONSEGREGATED FACILITIES. By entering into this
lease, the Lessee certifies, as specified in 41 CFR 60-1.8, that it does not
and will not maintain or provide for its employees any segregated facilities
at any of its establishments and that it does not and will not permit its
employees to perform their services at any location under its control where
segregated facilities are maintained. As used in this certification, the
term "segregated facilities" means, but is not limited to, any waiting rooms,
work areas, restrooms and washrooms, restaurants and other eating areas,
timeclocks, locker rooms and other storage or dressing areas, parking lots,
drinking fountains, recreation or entertainment areas, transportation, and
housing facilities provided for employees which are segregated by explicit
directive or are in fact segregated on the basis of race, color, religion, or
national origin, because of habit, local custom, or otherwise. The Lessee
further agrees that it will obtain identical certifications from proposed
contractors and subcontractors prior to award of contracts or subcontracts
unless they are exempt under 41 CFR 60-1.5.

SEC. 17. RESERVATIONS TO LESSOR. All rights in the leased area not
expressly granted to the Lessee by the Act, the regulations, or this lease
are hereby reserved to the Lessor. Without limiting the generality of the
foregoing, reserved rights included:

(a) the right to authorize geological and geophysical exploration in
the lease area which does not unreasonably interfere with or endanger actual
operations under the lease, and the right to grant such easements or
rights-of-way upon, through, or in the leased area as may be necessary or
appropriate to working of other lands or to the treatment and shipment of
products thereof by or under authority of the Lessor;

(b) the right to grant leases for any minerals other than sulphur
and/or salt within the leased area, except that operations under such leases
shall not unreasonably interfere with or endanger operations under this lease;

(c) the right, as provided in section 12(d) of the Act, to restrict
operations in the leased area or any part thereof which may be designated by
the Secretary of Defense, with

<PAGE>

approval of the President, as being within an area needed for national
defense and, so long as such designation remains in effect, no operations may
be conducted on the surface of the leased area or the part thereof included
within the designation except with the concurrence of the Secretary of
Defense. If operations or production under this lease within any designated
area are suspended pursuant to this paragraph, any payments of rentals and
royalty prescribed by this lease likewise shall be suspended during such
period of suspension of operations and production, the term of this lease
shall be extended by adding thereto any such suspension period, and the
Lessor shall be liable to the Lessee for such compensation as is required to
be paid under the Constitution of the United States.

SEC. 18. TRANSFER OF LEASE. The Lessee shall file for approval with the
appropriate field office of the Minerals Management Service any instrument of
assignment or other transfer of this lease, or any interest therein, in
accordance with applicable laws and regulations.

SEC. 19. SURRENDER OF LEASE. The Lessee may surrender this entire lease or
any officially designated subdivision of the leased area by filing with the
appropriate field office of the Minerals Management Service a written
relinquishment, in triplicate, which shall be effective as of the date of
filing. No surrender of this lease or of any portion of the leased area
shall relieve the Lessee or its surety of the obligation to pay all accrued
rentals, royalties, and other financial obligations or to abandon all works
on the area to be surrendered in a manner satisfactory to the Director.

SEC. 20. REMOVAL OF PROPERTY ON TERMINATION OF LEASE. Within a period of 1
year after termination of this lease in whole or in part, the Lessee shall
remove all devices, works, and structures from the premises no longer subject
to the lease in accordance with applicable regulations and orders of the
Director. However, the Lessee may, with the approval of the Director,
continue to maintain devices, works, and structures on the leased area for
drilling or producing on other Leases.

SEC. 21. REMEDIES IN CASE OF DEFAULT.

(a) Whenever the Lessee fails to comply with any of the provisions of
the Act, the regulations issued pursuant to the Act, or the terms of this
lease, the lease shall be subject to cancellation in accordance with the
provisions of section 5(c) and (d) of the Act and the Lessor may exercise any
other remedies which the Lessor may have, including the penalty provisions of
section 24 of the Act. Furthermore, pursuant to section 8(o) of the Act, the
Lessor may cancel the lease if it is obtained by fraud or misrepresentation.

(b) Nonenforcement by the Lessor of a remedy for any particular
violation of the provisions of the Act, the regulations issued pursuant to
the Act, or the terms of this lease shall not prevent the cancellation of
this lease or the exercise of any other remedies under paragraph (a) of this
section for any other violation or for the same violation occurring at any
other time.

SEC. 22. UNLAWFUL INTEREST. No member of, or Delegate to, Congress, or
Resident Commissioner, after election or appointment, or either before or
after they have qualified, and during their continuance in office, and no
officer, agent, or employee of the Department of the Interior, except as
provided in 43 CFR Part 20, shall be admitted to any share or part in this
lease or derive any benefit that may arise therefrom. The provisions of
Section 3741 of the Revised Statutes, as amended, 41 U.S.C. 22, and the Act
of June 25, 1948, 62 Stat. 702, as amended, 18 U.S.C. 431-433, relating to
contracts made or entered into or accepted by or on behalf of the United
States, form a part of this lease insofar as they may be applicable.

SEC. 23. SPECIAL PROVISIONS.

(a) Any lease issued for an initial period of 10 years will be canceled
after 5 years, following notice pursuant to the Outer Continental Shelf Lands
Act, where drilling of an exploratory well has not been commenced before the
end of the 5th year, or if the well has not been drilled in conformance with
the approved exploration plan criteria, or if there is not a suspension of
operations in effect.

(b) The Lessee is granted the exclusive right to drill salt wells
within the leased area and to use the salt produced therefrom for
sulphur-mining operations pursuant to the Act free of royalty on the lease,
on the condition that the drilling is conducted in accordance with procedures
approved by the Director.

(c) The Lessee shall pay no royalty on salt produced and consumed or
otherwise used on the lease for the production of sulphur. The Lessee shall
pay a fixed royalty of 5% at the mine for any salt produced and used or
otherwise disposed of off the leased area for purposes other than sulphur
production.
<PAGE>

United States
Department of the Interior
Minerals Management Service

Outer Continental Shelf, Central Gulf of Mexico
Sulphur and Salt Lease Sale

OCS-G 9372

STIPULATION NO. 1--PROTECTION OF ARCHAEOLOGICAL RESOURCES

(1) "Archaeological resource" means any prehistoric or historic district,
site, building, structure, or object (including shipwrecks); such term
includes artifacts, records, and remains which are related to such a
district, site, building, structure, or object (Section 301(5), National
Historic Preservation Act, as amended, 16 U.S.C. 470w(5)). "Operations"
means any drilling, mining, or construction or placement of any structure for
exploration, development, or production of the lease.

(2) If the Regional Director (RD) believes an archaeological resource may
exist in the lease area, the RD will notify the lessee in writing. The
Lessee shall then comply with subparagraphs (a) through (c).

(a) Prior to commencing any operations, the lessee shall prepare a
report, as specified by the RD, to determine the potential existence of any
archaeological resource that may be affected by operations. The report,
prepared by an archaeologist and a geophysicist, shall be based on an
assessment of data from remote-sensing surveys and of other pertinent
archaeological and environmental information. The lessee shall submit this
report to the RD for review.

(b) If the evidence suggests that an archaeological resource may be
present, the lessee shall either:

(i) Locate the site of any operation so as not to adversely affect
the area where the archaeological resource may be; or

(ii) Establish to the satisfaction of the RD that an archaeological
resource does not exist or will not be adversely affected by operations.
This shall be done by further archaeological investigation, conducted by an
archaeologist and a geophysicist, using survey equipment and techniques
deemed necessary by the RD. A report on the investigation shall be submitted
to the RD for review.

(c) If the RD determines that an archaeological resource is likely to
be present in the lease area and may be adversely affected by operations, the
RD will notify the lessee immediately. The lessee shall take no action that
may adversely affect the archaeological resource until the RD has told the
lessee how to protect it.

(3) If the lessee discovers any archaeological resource while conducting
operations on the lease area, the lessee shall report the discovery
immediately to the RD. The lessee shall make every reasonable effort to
preserve the archaeological resource until the RD has told the lessee how to
protect it.

STIPULATION NO. 3--HYDROCARBON DISCOVERIES STIPULATION

Sulphur and salt leases are granted separately from oil and gas leases.
Therefore, any hydrocarbons discovered by the sulphur and salt lessee cannot
be produced under this lease. If the lessee discovers hydrocarbons while
conducting sulphur and salt operations on the lease area, the lessee shall
report the discovery immediately to the Regional Director (RD). If the RD
determines that the discovery is significant and the Director determines that
release of the information is necessary for the proper development of the
filed or area, then a public announcement of the significant hydrocarbon
discovery will be made pursuant to 30 CFR 250.3.

<PAGE>

IMC Fertilizer, Inc. Felmont Oil Corporation
- ---------------------------------- ----------------------------------
(Lessee) (Lessee)

/s/ James L. Frye /s/ Richard A. Mills
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(Signature of Authorized Officer (Signature of Authorized Officer)

James L. Frye Richard A. Mills
- ---------------------------------- ----------------------------------
(Name of Signatory) (Name of Signatory)

Vice President, Service Operations Vice president
- ---------------------------------- ----------------------------------
(Title) (Title)

March 28, 1988 March 30, 1988
- ---------------------------------- ----------------------------------
(Date) (Date)

2315 Sanders Rd. 350 Glenborough, Ste. 300
Northbrook, Il 60062 Houston, TX 77067
- ---------------------------------- ----------------------------------
(Address of Lessee) (Address of Lessee)
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- ------------------------------------------------------------------------------

- ---------------------------------- ----------------------------------
(Lessee) (Lessee)

- ---------------------------------- ----------------------------------
(Signature of Authorized Officer) (Signature of Authorized Officer)

- ---------------------------------- ----------------------------------
(Name of Signatory) (Name of Signatory)

- ---------------------------------- ----------------------------------
(Title) (Title)

- ---------------------------------- ----------------------------------
(Date) (Date)

- ---------------------------------- ----------------------------------
(Address of Lessee) (Address of Lessee)

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IF THIS LEASE IS EXECUTED BY A CORPORATION, IT MUST BEAR THE CORPORATE SEAL.
<PAGE>