SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials by Rule 14a-6(c)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Freeport-McMoRan Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PRELIMINARY COPIES
FREEPORT-McMoRan INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
October [__], 1995
September [__], 1995
A Special Meeting of Stockholders of Freeport-McMoRan Inc. will be
held at the offices of the Company, 1615 Poydras Street, New Orleans,
Louisiana on October __, 1995, at 11:00 a.m. for the following purpose:
1. To approve an amendment to the Company's Certificate of
Incorporation to effect a one-for-six reverse split of the
Company's Common Stock, reduce the par value of the Common
Stock and decrease the number of authorized shares of Common
Stock.
The Board of Directors has fixed September [__], 1995, as the record
date for the determination of stockholders entitled to vote at the meeting.
If you will be unable to attend the meeting, kindly mark, sign, date
and return the enclosed proxy. A postage prepaid envelope is enclosed for
your use. Prompt response is helpful, and your cooperation will be
appreciated.
By Order of the Board of Directors.
MICHAEL C. KILANOWSKI, JR.
Secretary
PRELIMINARY COPIES
FREEPORT-McMoRan INC.
1615 Poydras Street
New Orleans, Louisiana 70112
The Annual Report to Stockholders for the year 1994, including
financial statements, was mailed to stockholders on or about March 21, 1995.
PROXY STATEMENT
This Proxy Statement and enclosed form of proxy are being furnished
on or about September [__], 1995, in connection with a solicitation of proxies
by the Board of Directors (the "Board of Directors" or the "Board") of
Freeport-McMoRan Inc. (the "Company") to be used at a Special Meeting of
Stockholders of the Company (the "Meeting") to be held on October __, 1995,
at 11:00 a.m..
Voting Procedure
Stockholders of record at the close of business on September [__],
1995 will be entitled to vote at the Meeting. On the record date, there were
[____] shares of Common Stock outstanding, and each of such shares will be
entitled to one vote at the Meeting.
The By-Laws of the Company provide that the holders of a majority of
the shares of Common Stock of the Company issued and outstanding and
entitled to vote at the Meeting, present in person or represented by proxy,
shall constitute a quorum at the Meeting.
Votes cast at the Meeting will be counted by the persons appointed by
the Company to act as inspectors of election for the Meeting. The inspectors
of election will treat shares of Common Stock represented by a properly
executed and returned proxy as present at the Meeting for purposes of
determining a quorum. Proxies marked "abstain" will be counted as shares
present for purposes of determining a quorum.
The proposal to amend the Certificate of Incorporation to effect a
one-for-six reverse split of the Company's Common Stock, reduce the par value
of the Common Stock and decrease the number of authorized shares of Common
Stock (the "Proposal") requires the affirmative vote of a majority of the
outstanding shares of Common Stock; therefore, with respect to the Proposal,
abstentions and broker non-votes will have the same effect as votes against it.
Proxies in the enclosed form are solicited by the Board of Directors
of the Company to provide an opportunity to every stockholder to vote on the
Proposal, whether or not he or she attends the Meeting in person. If proxies
in the enclosed form are properly executed and returned, the shares represented
thereby will be voted at the Meeting in accordance with stockholder direction.
Any stockholder executing a proxy may revoke that proxy or submit a revised
one at any time before it is voted. A stockholder may also attend the Meeting
in person and vote by ballot, thereby canceling any proxy previously given.
Except for the Proposal, the Board of Directors has no knowledge of any other
matters to be presented for action at the Meeting. If any other matters
should properly come before the Meeting, it is the intention of the persons
designated in the proxy to vote thereon according to their best judgment.
Proxy Solicitation
The cost of soliciting proxies will be borne by the Company. In
addition to solicitations by mail, arrangements have been made for brokers and
nominees to send proxy material to their principals, and the Company will
reimburse them for their reasonable expenses in doing so. The Company has
retained Georgeson & Co. Inc., Wall Street Plaza, New York, New York to assist
it in the solicitation of proxies from brokers and nominees. It is estimated
that the fees for the services of that firm will be [___]; the Company also
will reimburse the firm for its reasonable out-of-pocket expenses incurred in
connection with providing the services. Certain employees of the Company, who
will receive no compensation for their services other than their regular
remuneration, may also solicit proxies by telephone, telegram, telex, telecopy
or personal interview.
Stockholder Proposals
Any proposal of a stockholder intended to be presented at the
Company's 1996 Annual Meeting must be received by the Company for inclusion in
the proxy statement and form of proxy for that meeting no later than November
22, 1995.
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION, AS
AMENDED, TO EFFECT A ONE-FOR-SIX REVERSE SPLIT OF THE COMPANY'S COMMON
STOCK, REDUCE THE PAR VALUE OF THE COMMON STOCK AND DECREASE THE NUMBER
OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has proposed an amendment to Article FOURTH
of the Company's Certificate of Incorporation, as amended, that would
effect a reverse split of the Company's Common Stock on the basis of one
new share of Common Stock for each six shares of presently outstanding
Common Stock, reduce the par value of the Common Stock from $1.00 per share
to $0.01 per share and decrease the authorized number of shares of Common
Stock from 300,000,000 shares to 100,000,000 shares, thereby reducing the
total number of authorized shares of capital stock from 350,000,000 shares
to 150,000,000 shares. As of September [__], 1995, [____] shares of
Common Stock were issued and outstanding, [____] shares were held in
treasury and [____] shares were unissued. As of September [__], 1995 there
were [____] shares of Common Stock reserved for issuance upon the
conversion of the Company's $4.375 Convertible Exchangeable Preferred Stock
(the "Preferred Stock") or upon the exercise of options under the Company's
stock option plans.
Reasons for the Proposed Reverse Stock Split
The Amendment follows the tax-free distribution (the "Distribution")
by the Company on July 17, 1995 to the holders of its Common Stock, on a pro
rata basis, of all of the Class B Common Stock of Freeport-McMoRan Copper &
Gold Inc. ("FCX"). FCX has experienced substantial growth during the years
since it was organized in 1987, providing a significant portion of the
Company's revenue, earnings and stock value. Following the Distribution, the
value of the Common Stock was substantially reduced.
The Company continues to own an approximate 51% interest in its
agricultural minerals affiliate, Freeport-McMoRan Resource Partners, Limited
Partnership ("FRP"). FRP is engaged in the production of phosphate
fertilizers and the mining of phosphate rock through IMC-Agrico Company; the
mining, transportation and terminalling of sulphur and the development and
production of related oil reserves.
The Company's Board of Directors believes that the total number of
shares outstanding following the Distribution is large relative to the
Company's market capitalization. By issuing one new share of Common Stock for
every six shares of presently outstanding Common Stock, the proposed reverse
stock split will decrease the number of outstanding common shares and increase
the per share price level of the Common Stock. The higher per share price of
the Common Stock would then be more consistent with the trading price of stock
of similarly situated companies. The proposed decrease in the par value and
reduction in the authorized number of shares of Common Stock result from the
proposed reverse stock split and the Distribution.
Principal Effects of the Proposal
The principal effects of the proposed reverse stock split would be
the following:
Based upon [____] shares of Common Stock outstanding on September
[__], 1995 the proposed one-for-six reverse stock split would decrease the
number of outstanding shares of Common Stock by approximately 83%, and
thereafter approximately [____] shares of Common Stock would be outstanding,
held by approximately [____] stockholders of record. The proposed reverse
stock split would not affect the proportionate equity interest in the Company
of any holder of Common Stock, except as may result from the provisions for
the elimination of fractional shares as described below. The proposed reverse
stock split will not affect the registration of the Common Stock under the
Securities Exchange Act of 1934 or the listing of the Common Stock on the New
York Stock Exchange.
The reverse stock split will leave certain stockholders with one or
more "odd-lots" of the Company's Common Stock, i.e., stock in amounts of less
than 100 shares. These shares may be more difficult to sell, or require a
greater commission per share to sell, than shares in even multiples of 100.
The Company is considering whether to commence, following the proposed reverse
stock split, an odd-lot program pursuant to which holders of fewer than 100
shares of Common Stock would be able to sell their holdings without
incurring the customary brokerage commissions associated with the sale of
an odd-lot. However, no assurance can be made that an odd-lot program will
be commenced.
As of [___], 1995 there were outstanding options to purchase shares
under the Company's stock option plans relating to an aggregate of [___]
shares of Common Stock. On that date [___] shares of Common Stock remained
available for grant under such plans. All of the outstanding options include
provisions for adjustments in the number of shares covered thereby, and the
exercise price thereof, in the event of a reverse stock split by appropriate
action of the Corporate Personnel Committee of the Company's Board of
Directors. If the proposed one-for-six reverse stock split is approved and
effected, there would be reserved for issuance upon exercise of all
outstanding options a total of [___] shares of Common Stock. Each of the
outstanding options would thereafter evidence the right to purchase
approximately 16.67% of the shares of Common Stock previously covered
thereby and the exercise price per share would be six times the previous
exercise price. The number of shares available for grant under the Company's
stock option plans would be decreased to approximately [___] shares of Common
Stock.
If the proposed one-for-six reverse stock split is approved and
effected, the conversion rate for shares of Preferred Stock would be adjusted
proportionately so that the new conversion rate would be approximately
16.67% of the present conversion rate and each share of Preferred Stock
would thereafter be convertible into one-sixth of the number of shares of
Common Stock that such share would have been convertible into immediately
prior to the reverse stock split. The number of shares of Common Stock
reserved for issuance for this purpose would decrease from [____] to [____].
The following table illustrates the principal effects of the proposed
reverse stock split discussed in the preceding paragraphs:
<TABLE>
<CAPTION>
Prior to
Reverse Stock After Reverse
Split and Stock Split
Number of Shares Amendment and Amendment
of Common Stock to Certificate to Certificate
--------------------------------------------------- --------------- --------------
<S> <C> <C>
Authorized......................................... 300,000,000 [100,000,000]
Outstanding........................................ [----] [-----]
Reserved for future issuance upon exercise of
options under the Company's stock option plans... [----] [-----]
Reserved for issuance in connection with future
grants under the Company's stock option plans.... [----] [-----]
Reserved for issuance upon conversion of shares
of Preferred Stock............................... [----] [-----]
Available for future issuance by action of the
Board of Directors (after giving effect to the
above reservations).............................. [----] [-----]
</TABLE>
Assuming the proposed amendment to the first paragraph of Article
FOURTH of the Company's Certificate of Incorporation, as amended, effecting
the Proposal is approved, a Certificate of Amendment amending the
Certificate of Incorporation, as amended, as set forth in Exhibit A to this
Proxy Statement will be filed with the Secretary of State of the State of
Delaware (the "Delaware Secretary of State") as promptly as practicable
thereafter. The amendment and the proposed reverse stock split would
become effective upon the date of filing (the "Effective Date").
Exchange of Common Stock Certificates; Receipt of Dividends
Following the reverse stock split, old Common Stock certificates
cannot be used on either transfers or deliveries of Common Stock, and holders
of such old Common Stock certificates will not receive any dividends declared
upon shares of Common Stock until such old Common Stock certificates have been
exchanged for new Common Stock certificates. Holders of old Common Stock
certificates, therefore, should complete and execute the enclosed letter of
transmittal and return it along with their certificates to Mellon Securities
Trust Company (the "Exchange Agent") in the enclosed [green] envelope. New
certificates representing the number of whole shares of Common Stock holders
own after giving effect to the reverse stock split will be sent to each
holder following the Effective Date. If the reverse stock split is not
effected, old Common Stock certificates will be returned.
Elimination of Fractional Share Interests
No scrip or fractional share certificates for Common Stock will be
issued in connection with the reverse stock split, but in lieu thereof, a
certificate or certificates evidencing the aggregate of all fractional shares
otherwise issuable will be issued to the Exchange Agent or its nominee, as
agent for the accounts of all holders of Common Stock otherwise entitled to
receive a fraction of a share in connection with the reverse stock split.
Sales of fractional interests will be effected by the Exchange Agent as soon as
practicable on the basis of prevailing market prices of the Common Stock on
the New York Stock Exchange at the time of sale. After the Effective Date,
the Exchange Agent will pay to such stockholders their pro rata share of the
net proceeds derived from the sale of their fractional interests. No service
charges or brokerage commissions will be payable by stockholders in connection
with the sale of fractional interests; all of such costs will be borne by the
Company.
Certain United States Federal Income Tax Consequences
The following is a general discussion of the material United States
federal income tax consequences of the proposed reverse split of the Company's
Common Stock. This discussion does not purport to deal with all aspects of
federal income taxation that may be relevant to holders of Common Stock and is
not intended to be applicable to all categories of investors, some of which,
such as dealers in securities, banks, insurance companies, tax-exempt
organizations and foreign persons, may be subject to special rules.
Furthermore, the following discussion is based on current provisions of the
Internal Revenue Code of 1986, as amended, and administrative and judicial
interpretations as of the date hereof, all of which are subject to change
(possibly on a retroactive basis). Holders of Common Stock are advised to
consult their own tax advisors regarding the federal, state, local and foreign
tax consequences of the proposed reverse stock split.
The proposed reverse stock split will be a tax-free recapitalization
for the Company and its stockholders, and no gain or loss will be recognized
to the Company or its stockholders who do not receive any cash as a result of
the reverse stock split. The aggregate tax basis of the new shares of Common
Stock (including fractional share interests sold by the Exchange Agent on
behalf of the stockholder) in the hands of a stockholder will be the same as
the aggregate basis of the shares of Common Stock held by the stockholder
immediately prior to the reverse stock split. A stockholder's holding period
for the new shares of Common Stock (including fractional share interests) will
include the holding period for the shares of Common Stock exchanged therefor,
provided the shares of Common Stock prior to the reverse stock split are held
as a capital asset on the date of the exchange. Where cash is received by a
stockholder as a result of a sale by the Exchange Agent of a fractional new
share of Common Stock, the stockholder will recognize gain or loss measured by
the difference between the amount of cash received and the adjusted basis of
the fractional share sold. Provided the shares of Common Stock prior to the
reverse stock split are held as a capital asset in the hands of the
stockholder, the gain or loss will be capital gain or loss.
Vote Required
The proposed amendment would effect a reverse stock split, reduce the
par value of the Common Stock and decrease the authorized number of shares of
Common Stock. Approval of the Proposal requires the affirmative vote of a
majority of the outstanding shares of Common Stock.
The foregoing summary of the amendment is qualified in its entirety
by reference to the complete text of the proposed revised first paragraph of
Article FOURTH of the Certificate of Incorporation, as amended, which is set
forth as Exhibit A to this Proxy Statement.
The Board of Directors recommends a vote "FOR" the approval of the
Proposal.
The Board of Directors reserves the right to abandon the proposed
amendment without further action by the stockholders at any time prior to the
filing of the amendment with the Delaware Secretary of State notwithstanding
authorization of the proposed amendment by the stockholders.
EXHIBIT A
1. The pertinent provisions of the proposed amendment modifying the first
paragraph of Article FOURTH of the Certificate of Incorporation of
Freeport-McMoRan Inc., as amended, are as follows:
FOURTH: The total number of shares of all classes of stock
which the corporation shall have authority to issue is 150,000,000
shares, of which 50,000,000 shares shall be Preferred Stock with a
par value of $1.00 per share and 100,000,000 shares shall be Common
Stock with a par value of $0.01 per share.
2. At the effective time of this amendment to the Certificate of
Incorporation of Freeport-McMoRan Inc., as amended, each six (6) issued and
outstanding shares of Common Stock, $1.00 par value, of the Company shall
be combined into one (1) validly issued, fully paid and nonassessable share
of Common Stock, $0.01 par value, of the Company. No scrip or fractional
shares shall be issued by reason of this amendment.
PROXY CARD
PRELIMINARY COPIES
FREEPORT-McMoRan INC.
1615 Poydras Street, New Orleans, Louisiana
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael C. Kilanowski, Jr. and
__________, or either of them, proxies of the undersigned with full power of
substitution, to vote all shares of the undersigned at the Special Meeting of
Stockholders to be held on October __, 1995, at 11:00 a.m. (local time) at the
offices of the Company, 1615 Poydras Street, New Orleans, Louisiana.
The Board of Directors unanimously recommends a vote FOR the following
proposal:
1. An amendment to the Company's Certificate of Incorporation to
effect a one-for-six reverse split of the Company's Common
Stock, reduce the par value of the Common Stock and decrease
the number of authorized shares of Common Stock.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed and dated on reverse side)
(Continued from other side)
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER AND WILL CONSTITUTE PRESENCE AT THE
SPECIAL MEETING FOR THE PURPOSE OF DETERMINING WHETHER A QUORUM IS PRESENT.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE FOREGOING PROPOSAL.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY COME BEFORE THE MEETING AND AT ANY AND ALL ADJOURNMENTS OR
POSTPONEMENTS THEREOF.
PLEASE DATE, SIGN EXACTLY AS NAME APPEARS BELOW, AND RETURN THIS
PROXY IN THE ENCLOSED POSTPAID ENVELOPE.
Dated: ____________, 1995
_________________________
Signature
_________________________
Signature if held jointly
(If signing as attorney,
administrator, executor, trustee,
guardian, etc., please add your
title as such.)
No additional postage need be
affixed to the enclosed envelope if
mailed in the United States. Your
prompt attention will be of
assistance.
