SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
SCHEDULE 14D-9/A
(AMENDMENT NO. 6)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
-----------------
ASARCO INCORPORATED
(Name of Subject Company)
ASARCO INCORPORATED
(Name of Person(s) Filing Statement)
COMMON STOCK, NO PAR VALUE PER SHARE
(Title of Class of Securities)
043413103
(CUSIP NUMBER OF CLASS OF SECURITIES)
FRANCIS R. MCALLISTER
ASARCO INCORPORATED
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
180 MAIDEN LANE
NEW YORK, NEW YORK 10038
(212) 510-2000
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement).
With Copies to:
J. MICHAEL SCHELL
MARGARET L. WOLFF
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
This Amendment No. 6 to the Solicitation/Recommendation Statement on
Schedule 14D-9 relates to the exchange offer for all of the outstanding
shares of ASARCO Common Stock which is described in a Tender Offer
Statement on Schedule 14D-1 of Phelps Dodge Corporation, a New York
corporation ("Phelps Dodge"), filed with the Securities and Exchange
Commission on September 3, 1999, as amended by Amendment No. 1 thereto,
filed with the Commission on September 22, 1999, which incorporates the
prospectus of Phelps Dodge contained in the Registration Statement on Form
S-4 of Phelps Dodge filed with the Commission on August 27, 1999, as
amended by Amendment No. 1 thereto filed with the Commission on September
1, 1999, Amendment No. 2 thereto filed with the Commission on September 2,
1999 and Post-Effective Amendment No. 1 thereto filed with the Commission
on September 22, 1999.
ITEM 3. IDENTITY AND BACKGROUND.
Subsection (b) of Item 3 is hereby amended by adding the following:
The Company has taken the following actions pursuant to authority
exercised by the Board of Directors and the Organization and Compensation
Committee of the Board of Directors (the "Committee"):
1. Incentive compensation awards for the year 1999 have been
established and approved for eligible recipients based upon improvements in
the returns to the Company's shareholders resulting from the proposed
merger of ASARCO and Cyprus Amax Minerals Company, anticipated increases in
copper production and reduction in the cost of the Company's copper
production. The awards are payable upon the closing of any transaction that
would constitute a "change in control" of ASARCO. The aggregate amount
payable pursuant to such awards is $10.4 million.
2. The Company amended two Employee Non-Qualified Deferred
Compensation Plans of ASARCO to provide for compensation to each
participant for the amount of lost tax deferral benefits resulting from the
acceleration of benefits resulting from any "change of control" of ASARCO.
The aggregate incremental cost of this amendment is approximately $1.8
million.
3. Under ASARCO's 1996 and 1990 Stock Incentive Plans the term
"Exercise Event" is defined to include a merger, tender offer or a change
in a majority of the ASARCO Board of Directors resulting from a proxy
contest. The Committee exercised its administrative authority under the
Plans to designate the consummation of a transaction with Phelps Dodge or
Grupo Mexico S.A. de C.V. ("Grupo Mexico") an "Exercise Event" under the
Plans. At the current exchange offer price announced by Phelps Dodge on
September 22, 1999, the exercise of all limited rights presently
outstanding under the Plans that contain an "in-the-money" exercise price
would cost an estimated $5.9 million. At the current tender offer price
announced by Grupo Mexico on September 24, 1999, the exercise of all
limited rights presently outstanding under the Plans that contain an
"in-the-money" exercise price would cost an estimated $6.1 million. The
Committee also has the discretion under the Plans to adjust the terms of
outstanding options in a manner it deems appropriate and equitable if it
determines that a proposed transaction may materially and adversely affect
the market value of the ASARCO Common Stock following the transaction. The
Plans permit options to be adjusted by substituting the publicly traded
stock of a successor corporation for the ASARCO Common Stock upon the
exercise of an option following consummation of the transaction without
adjustment to the exercise price of the option. Pursuant to this authority,
the Committee determined to substitute shares of Phelps Dodge Common Stock
or the equity securities of Grupo Mexico, as the case may be, for the
shares of ASARCO Common Stock subject to the options and to adjust the
options accordingly, subject to either company's becoming a successor
corporation as contemplated in the Plans. The Committee also determined to
adjust the terms of the options granted prior to January 1999 under the
1996 Stock Incentive Plan to permit the exercise of such options following
termination of employment by ASARCO for up to the full term of the option
and to adjust the terms of the outstanding options granted under the 1990
Stock Incentive Plan to permit the exercise of those options until the
earlier of the expiration date of the option or three years following
termination of employment with the consent of ASARCO and. The Committee
determined that all terminations of employment by reason of early
retirement are to be deemed to be with the consent of ASARCO, and it
further determined that optionees currently employed by a subsidiary of
ASARCO will be considered terminated with consent if their employer ceases
to be a subsidiary of ASARCO.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Subsection (b) of Item 4 is hereby amended by adding the following:
(b) On September 22, 1999, Phelps Dodge Corporation (NYSE: PD)
announced that it had amended its offers to acquire ASARCO Incorporated
(NYSE: AR) and Cyprus Amax Minerals Company (NYSE: CYM) by changing the
proposed exchange ratios and introducing cash components to both offers.
Under its amended exchange offer for Asarco, Phelps Dodge is now
offering to acquire all shares of ASARCO for $9.00 in cash and 0.2880 of a
Phelps Dodge share per ASARCO share on a fully prorated basis. Based on
Phelps Dodge's closing share price on September 24, 1999, the revised offer
currently values ASARCO at $24.71 per share, or a total equity value of
$983.6 million, based on approximately 39.8 million ASARCO shares
outstanding.
Phelps Dodge also amended the purchase price in its offer to acquire
all shares of Cyprus Amax to $6.89 in cash and 0.2203 of a Phelps Dodge
share per Cyprus Amax share on a fully prorated basis. Based on Phelps
Dodge's closing share price yesterday, the revised offer currently values
Cyprus Amax at $18.91 per share, or a total equity value of $1.711 billion,
based on approximately 90.5 million Cyprus Amax shares outstanding.
ITEM 7. CERTAIN NEGOTIATION AND TRANSACTIONS BY THE SUBJECT COMPANY
Subsection (a) of Item 7 is hereby amended by adding the following:
The Board of Directors of ASARCO Incorporated has authorized
management to explore all available strategic alternatives that could
achieve maximization of shareholder value for ASARCO. Consistent with the
Cyprus Amax/ASARCO merger agreement, negotiations are underway in pursuit
of this strategic objective. The alternatives being explored could lead to
and involve further negotiations that may result in: (i) an extraordinary
transaction, such as a merger or reorganization, involving the Company or
any subsidiary of the Company and another company; (ii) a purchase, sale or
transfer of a material amount of assets by the Company or one or more
subsidiaries of the Company; (iii) a tender or exchange offer for or other
acquisition of securities of the Company; or (iv) a material change in the
present capitalization or dividend policy of the Company.
The Board has determined that disclosure of the possible terms of any
transactions or proposals of the type referred to above in this Item 7
prior to an agreement in principle with respect thereto would jeopardize
the initiation or continuation of negotiations with respect to such
transactions and has, accordingly, adopted a resolution directing
management not to disclose such possible terms, or the parties thereto,
until such an agreement has been reached.
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement
is true, complete and correct.
ASARCO INCORPORATED
By /s/ Francis R. McAllister
---------------------------------------
s Name: Francis R. McAllister
Title: Chairman and
Chief Executive Officer
Dated: September 27, 1999
