SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1994
Commission File Number: 1-9916
FREEPORT-MCMORAN COPPER & GOLD INC.
Incorporated in Delaware 74-2480931
(IRS Employer Identification No.)
First Interstate Bank Building, One East First Street, Suite 1600,
Reno, Nevada 89501
Registrant's telephone number, including area code: (702) 688-3000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes /X/ No___
On March 31, 1994, there were issued and outstanding 63,803,313 shares
of the registrant's Class A Common Stock, par value $0.10 per share, and
142,129,602 shares of its Class B Common Stock, par value $0.10 per
share.
FREEPORT-McMoRan COPPER & GOLD INC.
TABLE OF CONTENTS
Page
----
Part I. Financial Information
Financial Statements:
Condensed Balance Sheets 3
Statements of Operations 4
Statements of Cash Flow 5
Notes to Financial Statements 6
Remarks 6
Management's Discussion and Analysis
of Financial Condition and
Results of Operations 7
Part II. Other Information 12
Signature 13
Exhibit Index E-1
FREEPORT-McMoRan COPPER & GOLD INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
FREEPORT-McMoRan COPPER & GOLD INC.
CONDENSED BALANCE SHEETS (Unaudited)
March 31, December 31,
1994 1993
---------- -----------
ASSETS (In Thousands)
Current assets:
Cash and short-term investments $ 37,651 $ 13,798
Accounts receivable:
Customers 99,472 122,527
Other 46,455 66,202
Inventories:
Product 71,362 58,247
Materials and supplies 160,075 153,681
Prepaid expenses and other 15,986 13,787
---------- ----------
Total current assets 431,001 428,242
Property, plant and equipment, net 1,845,124 1,646,603
Other assets 46,648 41,808
---------- ----------
Total assets $2,322,773 $2,116,653
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 270,114 $ 238,948
Current portion of long-term debt and
short-term borrowings 59,229 48,791
---------- ----------
Total current liabilities 329,343 287,739
Long-term debt, less current portion 104,045 109,829
Zero coupon exchangeable notes - 102,039
Accrued postretirement benefits and
other liabilities 182,471 188,165
Deferred income taxes 223,384 201,553
Minority interests 57,378 46,781
Mandatory redeemable gold-denominated
preferred stock 399,999 232,620
Stockholders' equity 1,026,153 947,927
---------- ----------
Total liabilities and stockholders'
equity $2,322,773 $2,116,653
========== ==========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
---------------------
1994 1993
-------- --------
(In Thousands,
Except Per Share
Amounts)
Revenues $266,153 $133,515
Cost of sales:
Site production and delivery 164,801 69,313
Depreciation and amortization 17,121 12,063
-------- --------
Total cost of sales 181,922 81,376
Exploration expenses 8,020 6,413
Provision for restructuring charges - 3,415
General and administrative expenses 23,080 16,857
------- --------
Total costs and expenses 213,022 108,061
-------- --------
Operating income 53,131 25,454
Interest expense, net - (5,629)
Other income (expense), net (116) 1,131
-------- --------
Income before income taxes and
minority interest 53,015 20,956
Provision for income taxes (23,142) (10,937)
Minority interests (4,009) (1,398)
-------- --------
Income before changes in accounting
principle 25,864 8,621
Cumulative effect of changes in accounting
principle, net - (9,854)
-------- --------
Net income (loss) 25,864 (1,233)
Preferred dividends (12,305) (3,927)
-------- --------
Net income (loss) applicable to common
stock $ 13,559 $ (5,160)
======== ========
Net income (loss) per share of common stock:
Before changes in accounting principle $.07 $ .02
Cumulative effect of changes in accounting
principle - (.05)
---- -----
$.07 $(.03)
==== =====
Average common shares outstanding 205,211 195,667
======= =======
Dividends per common share $.15 $.15
==== ====
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF CASH FLOW (Unaudited)
Three Months Ended
March 31,
----------------------
1994 1993
-------- --------
(In Thousands)
Cash flow from operating activities:
Net income (loss) $ 25,864 $ (1,233)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Cumulative effect of changes in
accounting principle - 9,854
Depreciation and amortization 17,121 12,063
Provision for restructuring and
valuation of assets, net of payments - 3,415
Deferred income taxes 8,311 5,131
Amortization of discount on zero
coupon exchangeable notes 352 3,403
Minority interests' share of net
income 4,009 1,398
(Increase) decrease in working capital,
net of acquisition:
Accounts receivable 36,796 62,221
Inventories (18,923) (11,237)
Prepaid expenses and other (2,198) (1,760)
Accounts payable and accrued
liabilities 18,268 (26,875)
Other (7,979) (8,431)
-------- --------
Net cash provided by operating
activities 81,621 47,949
-------- --------
Cash flow from investing activities:
Capital expenditures (168,487) (100,947)
Acquisition of RTM, net of cash
acquired (5,756) (1,354)
-------- --------
Net cash used in investing activities (174,243) (102,301)
-------- --------
Cash flow from financing activities:
Cash dividends paid:
Common stock (30,833) (29,321)
Preferred stock (10,333) (3,927)
Minority interest (6,304) (6,135)
Proceeds from debt 123,922 -
Repayment of debt (118,453) -
Net proceeds from sale of gold-denominated
preferred stock 158,476 -
-------- --------
Net cash provided by (used in)
financing activities 116,475
(39,383)
-------- --------
Net increase (decrease) in cash and
short-term investments 23,853 (93,735)
Cash and short-term investments at
beginning of year 13,798 371,842
-------- --------
Cash and short-term investments at
end of period $ 37,651 $278,107
======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
NOTES TO FINANCIAL STATEMENTS
1. REDEEMABLE PREFERRED STOCK OFFERING
In January 1994, Freeport-McMoRan Copper & Gold Inc. (FCX) sold
publicly 4.3 million depositary shares representing 215,279 shares of
its Gold-Denominated Preferred Stock, Series II. Each depositary
share has a cumulative quarterly cash dividend equal to the value of
0.0008125 ounces of gold and is subject to mandatory cash redemption
in February 2006 for the value of 0.1 ounces of gold. The net
proceeds from this offering were loaned to P.T. Freeport Indonesia
Company (PT-FI) to fund the ongoing expansion activities and for
general corporate purposes.
2. REDEMPTION OF ZERO COUPON EXCHANGEABLE NOTES
In December 1993, FCX called its Zero Coupon Exchangeable Notes (the
Notes) for redemption in January 1994. During January 1994, Notes
with a face amount of $386.0 million were presented for exchange into
5.8 million shares of Class A common stock and the remaining Notes
were redeemed for $.3 million in cash. As a result of the issuance
by FCX of its Class A common stock, PT-FI issued shares of its stock
to FCX, bringing FCX's direct ownership of PT-FI to 81.28 percent at
March 31, 1994.
3. PUBLIC DEBT OFFERING
In April 1994, P.T. ALatieF Freeport Finance Company B.V. (AFFC), a
wholly owned subsidiary of FCX, sold publicly $120 million of its 9
3/4% Senior Notes Due 2001 (the 9 3/4% Notes), for net proceeds of
$116.3 million. The 9 3/4% Notes are guaranteed by FCX. The
proceeds from the sale of the 9 3/4% Notes will be loaned by AFFC to
PT-FI and then to P.T. ALatieF Freeport Infrastructure Corporation
and one or more Infrastructure Affiliates to purchase infrastructure
assets from PT-FI.
4. INTEREST COSTS
Interest expense is net of capitalized interest which totaled $5.9
million and $5.2 million in the first quarter of 1994 and 1993,
respectively.
5. RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the first three months of
1994 and 1993 was 8.0 to 1 and 1.5 to 1, respectively. For this
calculation, earnings include income from continuing operations
before income taxes, minority interests, and fixed charges. Fixed
charges include interest and that portion of rent deemed
representative of interest.
_______________________
Remarks
The information furnished herein should be read in conjunction with
FCX's financial statements contained in its 1993 Annual Report to
stockholders and incorporated by reference in its Annual Report on
Form 10-K.
The information furnished herein reflects 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.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
The results of Freeport-McMoRan Copper & Gold Inc. (FCX) include its majority
owned subsidiaries, including P.T. Freeport Indonesia Company (PT-FI) and Rio
Tinto Minera, S.A. (RTM). First-quarter 1993 operating results do not
include RTM, since the acquisition took place at the end of March 1993.
FCX's first-quarter 1994 net income applicable to common stock totaled
$13.6 million ($.07 per share) compared with a loss of $5.2 million ($.03 per
share) for the 1993 period. Income for the 1993 period was negatively
impacted by restructuring charges of $3.4 million ($1.9 million to net income
or $.01 per share) for personnel costs relating to a reduction in staff
engaged in administrative services on behalf of FCX by Freeport-McMoRan Inc.
(FTX), the parent company of FCX. First-quarter 1993 earnings also reflect
the cumulative effect of changes in accounting principle reducing net income
by $9.9 million ($.05 per share).
A reconciliation of first-quarter revenues is presented below (in
millions):
Revenues - 1993 $133.5
Increases (decreases):
RTM revenues 111.9
Elimination of intercompany sales (31.0)
PT-FI sales:
Price realizations:
Copper (9.7)
Gold 7.7
Volumes:
Copper 15.8
Gold 23.3
Treatment charges 5.0
Adjustments to prior period concentrate sales 9.6
Other .1
------
Revenues - 1994 $266.2
======
Revenues were negatively impacted by a 7 percent decrease in copper
price realizations partially offset by a 17 percent increase in gold
price realizations. Copper sales volumes increased 13 percent between
periods. Increased mill throughput was partially offset by lower grades
which were 9 percent lower. Gold sales volumes increased 43 percent over
the 1993 period reflecting increased mill throughput and a 16 percent
increase in gold grades. See operating statistics below. Treatment
charges declined due to a tightening in the concentrate market as the
industry's inventories were reduced for much of 1993 and into 1994 and
because of lower copper prices as treatment charges vary to an extent
with the price of copper. Adjustments to prior period concentrate sales
for the current quarter resulted in a positive adjustment of $2.6
million, primarily caused by favorable adjustments to the gold content of
prior period sales, compared to the 1993 period when falling copper
prices resulted in a $7.0 million negative adjustment.
During 1993, copper prices dropped to their lowest levels since
1987, reflecting lower demand, particularly in Europe and Japan, caused
by the continuing global recession. Copper prices strengthened beginning
in late 1993, but currently remain below $.90 per pound. PT-FI has in
place a price protection program that eliminates exposure to copper price
declines below an average $.90 per pound for estimated copper sales
priced during 1994. At March 31, 1994, 174.5 million pounds of copper
remained to be contractually priced during future quotational periods.
As a result of PT-FI's price protection program, these pounds are
recorded at an average price of $.90 per pound. PT-FI recently extended
its price protection program to cover anticipated copper sales through
1995. For the first half of 1995, PT-FI's program established a minimum
average selling price of $.875 per pound, with full participation in any
price increase above an average of approximately $.97 per pound. Fourth-
quarter 1994 copper sales, a substantial portion of which will be priced
in the first quarter of 1995, are covered under this program. For the
second half of 1995, PT-FI's program established an average floor price
of $.83 per pound, while allowing full benefit from prices above that
amount. PT-FI has sales commitments from its purchasers for virtually
all of its estimated 1994 production which is to be priced at the current
market price under the terms of the contracts.
PT-FI OPERATIONS First Quarter
-------------------
1994 1993
------- -------
Ore milled (metric tons per day) 73,400 61,300
Copper grade (%) 1.37 1.51
Gold grade (grams per metric ton) 1.34 1.16
Recovery rate (%)
Copper 83.0 86.1
Gold 69.7 73.7
Copper (000s of recoverable pounds)
Production 160,500 150,600
Sales 155,700 138,100
Average realized price a $.90 $.97
Gold (recoverable ounces)
Production 190,800 146,800
Sales 201,300 140,300
Average realized price $381.67 $326.93
Gross profit per pound of copper:
Average realized price 90.0cent 97.4cent
---- ----
Production costs:
Site production and delivery 59.4 50.2
Gold and silver credits (48.9) (33.3)
Treatment charges 23.1 25.2
Royalty on recoverable metals 1.4 2.2
---- ----
Cash production costs 35.0 44.3
Depreciation and amortization 8.1 8.7
---- ----
Total production costs 43.1 53.0
---- ----
Revenue adjustments b .6 (6.6)
---- ----
Gross profit per pound 47.5cent 37.8cent
==== ====
a. FCX recognized $6.3 million (excluding $1.5 million in amortized
cost) in the first quarter of 1994 as a result of the price
protection program discussed above. Excluding amounts recognized
under this program, the realization for the first quarter of 1994
would have been $.86 per pound.
b. Reflects adjustments primarily for prior period concentrate sales
(net of related amounts recognized under the price protection
program) and amortization of the cost of the price protection
program.
PT-FI's first-quarter mill throughput rate increased 20 percent
compared with the 1993 period as the expansion activities continue toward
a level of 115,000 metric tons per day (MTPD) by year-end 1995. PT-FI
site production and delivery costs totaled $92.5 million for the first
quarter of 1994, a 33 percent increase over the 1993 period. Unit site
production and delivery costs during the 1994 quarter increased by 18
percent over the year ago period resulting from lower production per ton
mined, the result of lower copper grades and recoveries, higher jobsite
administrative expenses, and expansion related activities. Unit site
production and delivery costs increased 20 percent over the last quarter
when production was 26 percent higher. The lower copper grades alone
accounted for approximately one-half of the per unit cost increase over
the year ago period and about two-thirds of the increase over the
previous quarter. For the remainder of 1994, site production and
delivery costs are still expected to be in excess of 50 cents per pound,
but lower than the first quarter, as grades and recoveries are
anticipated to increase, particularly in the second half of the year.
First-quarter 1994 per pound gold and silver credits increased 47
percent over the 1993 period because of higher gold grades (16 percent)
and realizations (17 percent).
Effective January 1, 1994, as a result of recently announced reserve
additions, PT-FI's depreciation rate decreased to 7.5 cents per pound
compared with 8.3 cents for 1993. Additionally, FCX is amortizing costs
in excess of book value ($.9 million for first-quarter 1994 and $.6
million for first-quarter 1993) relating to certain capital stock
transactions with PT-FI.
First-quarter 1994 general and administrative expenses were $23.1
million, compared with $16.9 million in the 1993 quarter as a result of
additional personnel and administrative effort required to manage the
expanding operations, financing for the expansions at PT-FI and RTM, and
the inclusion of RTM results ($3.8 million in general and administrative
expenses) during the current period. In the first quarter of 1994, FCX
recorded a $1.9 million reduction to its general and administrative
expenses resulting from a change in the estimate of cost relating to
excess office space. The initial estimated cost, recorded in the second
quarter of 1993, resulted from the restructuring of FTX's administrative
organization. Further increases in future general and administrative
expenses by FCX are anticipated in conjunction with continuing expansion
at PT-FI and RTM.
Exploration expenses, currently budgeted at $41 million for 1994,
including $6 million for RTM, totaled $8.0 million in the first quarter
of 1994 compared with $6.4 million in the 1993 period, as FCX
aggressively explored promising prospects in Irian Jaya and Spain.
FCX's total interest cost (before capitalization) was reduced to $5.9
million in the first quarter of 1994 from $10.8 million in the 1993
period as a result of (i) a lower interest rate from the restructuring of
PT-FI's credit agreement in June 1993; (ii) a reduction in debt using
proceeds from the sale of preferred stock in the second half of 1993 and
the first quarter of 1994; and (iii) conversions of FCX's zero coupon
exchangeable notes, partially offset by $2.7 million of interest cost
from RTM. FCX's preferred stock dividends totaled $12.3 million in 1994
and $3.9 million in 1993.
The Contract of Work (COW) provides a 35 percent corporate income tax
rate for PT-FI and a 15 percent withholding tax on interest for debt
incurred after the signing of the COW and on dividends paid to FCX by PT-
FI. The additional withholding required on interest and dividends paid
to FCX by PT-FI totaled $7.1 million for 1994 and $5.1 million for 1993
resulting in an effective tax rate of 44 percent in the first quarter of
1994 compared with 52 percent in the 1993 period.
RTM OPERATIONS First Quarter
-------------
1994
-------
Smelter operations (metric tons):
Concentrate treated 118,000
Anode production 37,900
Cathode production 34,600
Gold operations:
Ore milled (MTPD) 18,100
Gold grade (grams per metric ton) 1.04
Sales (recoverable ounces) 37,400
Average realized price $346.33
a. Includes a negative hedging adjustment of $37.91 per ounce.
For the first quarter of 1994, RTM contributed earnings of $1.7
million. RTM's smelter operated at 92 percent of capacity for the first
quarter of 1994, approximately 5 percent below budget, primarily due to
an absorption tower breakdown in March which was repaired within a few
days. Smelter operating rates are forecast to be at 97 percent for the
remainder of 1994. RTM has commitments from most of its suppliers for
1994 treatment charge rates in excess of current spot market rates.
Cathode refinery operations were not affected by this breakdown as there
was sufficient anode inventory on hand to continue to run the tankhouse
at full capacity. RTM's gold operations realized a mill throughput level
slightly above fourth-quarter 1993 levels, although current quarter gold
production was 15 percent below fourth-quarter 1993 primarily due to
lower ore grades and lower gold recovery rates. Gold production for the
remainder of 1994 is expected to remain at current levels.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operations increased to $81.6 million during the first
quarter of 1994, compared with $47.9 million for the 1993 period,
reflecting higher net income, a decrease in accounts receivable from
collection of fourth-quarter 1993 sales, and an increase in accounts
payable and accrued liabilities related to expansion activities.
First-quarter 1994 cash flow used in investing activities totaled
$174.2 million, reflecting a $67.5 million increase in capital
expenditures for continued plant expansion at PT-FI, the Enhanced
Infrastructure Project (EIP) as discussed below, and capital expenditures
at RTM. Cash flow provided by financing activities totaled $116.5
million compared with $39.4 million used in financing activities during
the 1993 period. Dividend payments increased by $8.1 million because of
increased common shares outstanding and dividends paid on depositary
shares issued during the second half of 1993. In January 1994, FCX
received $158.5 million from the sale of depositary shares representing
its Gold-Denominated Preferred Stock, Series II (Note 1).
In April 1994, a subsidiary of FCX completed a public offering of 9
3/4% Senior Notes due 2001, which netted $116.3 million in proceeds to be
used to purchase infrastructure assets from PT-FI as discussed below and
in Note 3 to the financial statements.
At March 31, 1994, FCX had $37.7 million of cash and short-term
investments, compared with $13.8 million at December 31, 1993. These
funds along with the $425.0 million availability at April 22, 1994 under
the PT-FI credit facility, anticipated cash flow from operations, third-
party financing for RTM's smelter expansion discussed below, the net
proceeds from the sale of the 9 3/4% Senior Notes, and proceeds from the
sale of assets to the EIP joint venture, provide flexibility for dividend
payments and ongoing operational, developmental, and exploratory needs.
Capital expenditures for 1994, net of the anticipated infrastructure
asset sales, are estimated to be approximately $380 million.
The full EIP (currently expected to involve aggregate cost of as much
as $500 million to $600 million to be completed in stages) includes plans
for commercial, residential, educational, retail, medical, recreational,
environmental and other infrastructure facilities to be constructed
during the next 20 years for PT-FI operations. The EIP will develop and
promote the growth of local and other third-party activities and
enterprises in Irian Jaya through the creation of certain necessary
support facilities. The initial phase of the EIP is under construction
and is scheduled for completion in 1996. Additional expenditures for EIP
assets beyond the initial phase depend on the long-term growth of PT-FI's
operations and would be expected to be funded by third-party financing
sources, which may include debt, equity or asset sales. As discussed
below, certain portions of the EIP and other existing infrastructure
assets are expected to be sold in the near future to provide additional
funds for the expansion to 115,000 MTPD.
During 1993, PT-FI entered into a joint venture agreement with P.T.
ALatieF Nusakarya Corporation (ALatieF), an Indonesian investor, which
provides for the sale of certain portions of the to-be-constructed
infrastructure assets and certain existing assets by PT-FI to a joint
venture or ventures (the ALatieF Joint Venture) owned one-third by PT-FI
and two-thirds by ALatieF for total consideration of $270 million. The
sale of the first group of assets to the ALatieF Joint Venture was
completed in December 1993 for a price of $90 million. Debt financing
for the remaining sales, which are anticipated for 1994 and later, was
finalized in April 1994 through the public offering of $120 million of 9
3/4% Senior Notes Due 2001, which are guaranteed by FCX (Note 3).
PT-FI has also entered into Letters of Intent to sell: (i) existing
and to-be-constructed power generation and transmission assets and
certain other power-related assets; (ii) certain aircraft, airport and
related operations; and (iii) certain construction equipment, port
facilities and related marine, logistics and related assets to other
joint ventures. The sales to these joint ventures are expected to
generate approximately $315 million (net of equity contributions) over
the next two years to be used to fund the EIP and the expansion to
115,000 MTPD. The foregoing letters of intent are not binding and are
subject to the execution of definitive agreements, financing, and certain
Indonesian Government approvals.
RTM's principal operations currently consist of a copper smelter with
an annual capacity of 150,000 metric tons of metal. In February 1994,
RTM obtained a commitment for short-term bank financing for up to $45
million, of which $5 million was outstanding at March 31, 1994, to fund
the cost of expansion to 180,000 metric tons of metal per year. FCX
recently announced plans to further expand RTM's copper smelter to
270,000 metric tons of metal production per year, scheduled for
completion by early 1996. The further expansion to 270,000 metric tons
of production and the current expansion to 180,000 metric tons involve
total estimated costs of approximately $215 million and is expected to be
financed through project financing and RTM's internal cash flows. RTM's
future cash flow is dependent on a number of variables including
fluctuations in the exchange rate between the United States dollar and
the Spanish peseta, future prices and sales volumes of gold, the timing
of the completion of the smelter expansion, and the supply/demand for
smelter capacity and its impact on related treatment and refining
charges. PT-FI has a long-term contract with RTM to provide the smelter
with a significant portion of its copper concentrate requirements.
Through 1995, FCX's capital expenditures are expected to be greater
than cash flow from operations. Upon completion of the previously
announced 115,000 MTPD expansion by year-end 1995, annual production is
expected to approach 1.1 billion pounds of copper and 1.5 million ounces
of gold. Subsequently, capital expenditures will be determined by the
results of FCX's exploration activities and ongoing capital maintenance
programs. Estimated capital expenditures for 1994 and 1995 for the
expansion to 115,000 MTPD, the initial phase of the EIP, ongoing capital
maintenance expenditures, and the expansion of RTM's smelter to 270,000
metric tons of metal per year are expected to range from $1.1 billion to
$1.2 billion and will be funded by operating cash flow, sales of existing
and to-be-constructed infrastructure assets and a wide range of financing
sources FCX believes are available as a result of the future cash flow
from PT-FI's mineral reserve asset base and RTM's smelter operations.
These sources include, but are not limited to, PT-FI's credit facility
and the public and private issuances of securities. The Company's long-
lived, low-cost reserve base provides its potential access to a broad
range of sources of capital.
The COW contains provisions for PT-FI to conduct or cause to be
conducted a feasibility study relating to the construction of a copper
smelting facility in Indonesia and for the eventual construction of such
a facility by PT-FI, if it is deemed to be economically viable by PT-FI
and the Government of Indonesia. FCX recently announced that PT-FI and
RTM have now taken the lead role in developing the proposed 150,000 to
200,000 metric tons of metal per year copper smelter in Gresik,
Indonesia. It is contemplated that PT-FI would provide approximately 50
percent of the annual concentrate feed required by the Gresik smelter.
Preliminary engineering on the proposed smelter has been completed, and
the smelter could be operational as early as 1998.
Payment of future dividends by FCX will depend on the payment of
dividends by PT-FI, which, in turn, depends on PT-FI's economic
resources, profitability, cash flow, and capital expenditures. It is the
policy of PT-FI to maximize its dividend payments to stockholders, taking
into account its operational cash needs including debt service
requirements. FCX currently pays an annual cash dividend of 60 cents per
share to its common shareholders. Management anticipates that this
dividend will continue at this level through completion of the expansion
in 1995, absent significant changes in the prices of copper and gold.
However, FCX's Board of Directors determines its dividend payment on a
quarterly basis and in its discretion may change or maintain the dividend
payment. In determining dividend policy, the Board of Directors
considers many factors, including current and expected future prices and
sales volumes, future capital expenditure requirements, and the
availability and cost of financing from third parties.
____________________
The results of operations reported and summarized above are not
necessarily indicative of future operating results.
FREEPORT-McMoRan COPPER & GOLD INC.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits to this report are listed in the Exhibit
Index appearing on page E-1 hereof.
(b) During the quarter for which this report is filed, the
registrant filed three Current Reports on Form 8-K, dated January 7, 1994
(reporting information under Item 5 and Item 7 and including the
following financial statements: Consolidating Condensed Balance Sheet,
Consolidating Statement of Operations and Consolidating Statement of Cash
Flow); January 12, 1994 (reporting information under Item 5 and Item 7);
and March 2, 1994 (reporting information under Item 5 and Item 7
including the following financial statements: Balance Sheets, Statements
of Income, Statements of Cash Flow and Statements of Stockholders'
Equity).
FREEPORT-McMoRan COPPER & GOLD INC.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ Stephen M. Jones
-------------------------------
Stephen M. Jones
Vice President and
Chief Financial Officer
Date: April 26, 1994
FREEPORT-McMoRan COPPER & GOLD INC.
EXHIBIT INDEX
Sequentially
Numbered
Number Description Page
------ ----------- ------------
4.1 Certificate of Designations of Gold-Denominated
Preferred Stock, Series II of FCX dated
January 19, 1994.
4.2 Deposit Agreement dated as of January 15, 1994
among FCX, Mellon Securities Trust Company,
as Depositary, and holders of depositary
receipts issued thereunder.
4.3 Form of Depositary Receipt. Incorporated by reference
to Exhibit 4.1 to the Application for Registration on
Form 8-A of FCX dated January 10, 1994.
4.4 U.S. Underwriting Agreement dated January 13, 1994.
4.5 International Underwriting Agreement dated
January 13, 1994.
CERTIFICATE OF DESIGNATIONS
OF
GOLD-DENOMINATED PREFERRED STOCK, SERIES II
(Par Value $0.10 Per Share)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware
We, the undersigned, being a Vice President and
the Secretary, respectively, of Freeport-McMoRan Copper &
Gold Inc. (hereinafter called the "Corporation"), a
corporation organized and existing under and by virtue of
the provisions of the General Corporation Law of the State
of Delaware,
DO HEREBY CERTIFY:
FIRST. The Certificate of Incorporation of the
Corporation, as amended (hereinafter called the "Certificate
of Incorporation"), authorizes the issuance of 2,000,000
shares of Preferred Stock, par value $0.10 per share, of
which 1,000,000 shares have been issued. The Board of
Directors of the Corporation is authorized by the
Certificate of Incorporation to provide, without further
stockholder action, for the issuance of any or all of the
shares of the Preferred Stock in one or more series, with
such designation, powers, preferences and relative,
participating, optional or other rights, and any
qualifications, limitations or restrictions thereof, as may
be determined by the Board of Directors of the Corporation
with respect to each particular series prior to the issue
thereof.
SECOND. The Board of Directors of the
Corporation, acting by Unanimous Written Consents dated
July 21, 1993 and January 6, 1994, and a Special Committee
thereof, pursuant to authority specifically granted to it by
such Board of Directors, acting by Unanimous Written Consent
dated January 13, 1994, duly adopted the following
resolutions authorizing the creation and issuance of a
series of Preferred Stock to be known as "Gold-Denominated
Preferred Stock, Series II."
RESOLVED, that the Board of Directors, pursuant to
authority vested in it by the provisions of the Certificate
of Incorporation of the Corporation, hereby authorizes the
issuance of a series of Preferred Stock of the Corporation
and hereby fixes the number, designation, preferences,
rights and any qualifications, limitations or restrictions
thereof as follows:
1. Designation. (a) 215,279 shares of Preferred
Stock of the Corporation are hereby constituted as a series
of Preferred Stock designated as "Gold-Denominated Preferred
Stock, Series II" (hereinafter called "this Series"). Each
share of this Series shall be identical in all respects with
the other shares of this Series. The Board of Directors is
authorized to increase or decrease (but not below the number
of shares of this Series then outstanding) the number of
shares of this Series.
(b) Shares of this Series which have been
redeemed for cash as hereinafter provided or purchased by
the Corporation shall be canceled, and shall revert to
authorized but unissued shares of Preferred Stock
undesignated as to series, and may be reissued as a part of
this Series or may be reclassified and reissued as part of a
new or existing series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, all
subject to the conditions or restrictions on issuance set
forth in any resolution or resolutions adopted by the Board
of Directors providing for the issue of such series of
Preferred Stock.
2. Dividends. (a) The holders of shares of this
Series shall be entitled to receive, but only out of funds
legally available therefor, cash dividends as hereinafter
provided. Such dividends shall be paid when, as and if
declared by the Board of Directors on the first day of
February, May, August and November in each year commencing
May 1, 1994 and ending February 1, 2006 (each such date
being referred to herein as a "Dividend Payment Date") to
holders of record on the record date determined by the Board
of Directors in advance of the payment of each particular
dividend; provided that dividends payable on February 1,
2006 (the "Mandatory Redemption Date") shall be paid as
provided in Section 4. Such dividends shall be cumulative
from the date of original issuance of the shares of this
Series.
(b) So long as any shares of this Series shall be
outstanding, the Corporation shall not, unless full
cumulative dividends for all past dividend periods shall
have been paid or declared and set apart for payment upon
all outstanding shares of this Series and the shares of any
other class or series of Preferred Stock (including the
existing series of Gold-Denominated Preferred Stock), the 7%
Convertible Exchangeable Special Preference Stock
(hereinafter called the "Special Preference Stock") and any
other class or series of stock of the Corporation ranking,
as to dividends, on a parity with shares of this Series (the
shares of any other class or series of Preferred Stock
(including the existing series of Gold-Denominated Preferred
Stock), the Special Preference Stock and any other class or
series of stock of the Corporation ranking, as to dividends,
on a parity with shares of this Series being herein referred
to as "Parity Dividend Stock"), (i) declare, pay or set
apart any amounts for dividends on, or make any other
distribution in cash or other property in respect of, the
Class A Common Stock of the Corporation (the "Class A Common
Stock"), the Class B Common Stock of the Corporation ("Class
B Common Stock") or any other stock of the Corporation
ranking junior to this Series as to dividends or
distribution of assets upon liquidation, dissolution or
winding up of the affairs of the Corporation (the Class A
Common Stock, the Class B Common Stock and any such other
stock being herein referred to as "Junior Stock"), other
than a dividend payable solely in Junior Stock, (ii)
purchase, redeem or otherwise acquire for value any shares
of Junior Stock, directly or indirectly, other than as a
result of a reclassification, exchange or conversion of one
Junior Stock for or into another Junior Stock, or other than
through the use of proceeds of a substantially
contemporaneous sale of other Junior Stock, or (iii) make
any payment on account of, or set aside money for, a sinking
or other like fund for the purchase, redemption or other
acquisition for value of any shares of Junior Stock. For
purposes of this Section 2 and of Section 4(f), if any
depositary shares have been issued with respect to any
series of stock, actions with respect to such depositary
shares, including acquisition of and payments on or with
respect to such depositary shares, shall be regarded as
actions with respect to such series of stock.
(c) If the funds available for the payment of
dividends are insufficient to pay in full the dividends
payable on all outstanding shares of this Series and shares
of Parity Dividend Stock, the total available funds to be
paid in partial dividends on the shares of this Series and
shares of Parity Dividend Stock shall be divided among this
Series and the Parity Dividend Stock in proportion to the
aggregate amounts of dividends accrued and unpaid with
respect to this Series and the Parity Dividend Stock.
Accruals of dividends shall not bear interest.
3. Dividend Rate. (a) The Dividend Rate per
quarter on each share of this Series shall be an amount
equal to the Dollar Equivalent Value (as defined below) of
________ ounces of gold. "Dollar Equivalent Value" means
the applicable Reference Gold Price multiplied by the
applicable number of ounces of gold. "Reference Gold Price"
means, when used to calculate the amount of any dividend
payable on any Dividend Payment Date (other than the
Mandatory Redemption Date, as to which the calculation shall
be made as provided in Section 4) the arithmetic average of
the London P.M. gold fixing price (or A.M. gold fixing price
if there is no P.M. gold fixing price on the applicable
trading date) for an ounce of gold in the London bullion
market on each of the five trading days ending on the second
trading day prior to the last day of the calendar quarter
immediately preceding such Dividend Payment Date, as
published in The Wall Street Journal (Eastern Edition) (or,
if such prices are not published in The Wall Street Journal,
as published in the Financial Times). If for any reason
gold is not traded during any relevant period in the London
bullion market or is not quoted in U.S. dollars in such
market, gold will be valued during such period or portion
thereof, as the case may be, on the basis of trading prices,
quoted in U.S. dollars, in the then principal international
trading market for gold as determined by the Corporation's
Board of Directors. On or before the fifth business day
preceding each record date for the payment of a dividend in
respect of the shares of this Series, the Corporation will
cause to be published in The Wall Street Journal (Eastern
Edition) or, if such newspaper is not then published, in a
newspaper or other publication of national circulation, the
amount of the dividend payable in respect of each share of
this Series on the next succeeding Dividend Payment Date.
(b) Dividends in respect of the first Dividend
Period shall accrue from the date of original issuance of
the shares of this Series and shall be calculated on the
basis of a year of 360 days consisting of 12 30-day months.
The term "Dividend Period", as used herein, means (i), with
respect to the May 1, 1994 Dividend Payment Date, the period
from the date of original issuance of the shares of this
Series to and including such Dividend Payment Date, and
(ii), with respect to any other Dividend Payment Date, the
period commencing on the day following the immediately
preceding Dividend Payment Date to and including such
Dividend Payment Date.
4. Redemption. (a) The shares of this Series
shall be subject to mandatory redemption by the Corporation,
out of funds legally available therefor, on the Mandatory
Redemption Date at the Dollar Equivalent Value of 2.0 ounces
of gold per share plus accrued and unpaid dividends (as
hereinafter defined) to the Mandatory Redemption Date.
(b) The shares of this Series shall not be
subject to redemption at the option of the Corporation
except as described in this Section 4(b). If on any
Dividend Payment Date the total number of shares of this
Series outstanding shall be less than 15% of the total
number of shares of this Series outstanding on the 40th day
following the date of original issuance of the shares of
this Series, the Corporation shall have the option to redeem
the outstanding shares of this Series, in whole but not in
part, out of funds legally available therefor, at an amount
equal to the Dollar Equivalent Value of 2.0 ounces of gold
per share plus accrued and unpaid dividends (as hereinafter
defined) to the date fixed for redemption. For purposes of
determining the number of shares of this Series outstanding
on any Dividend Payment Date, the shares of this Series
acquired by the Corporation on or prior to such Dividend
Payment Date and not theretofore canceled (or in the case of
any shares of this Series represented by depositary shares,
the depositary shares representing shares of this Series
acquired by the Corporation on or prior to such Dividend
Payment Date and not theretofore delivered to the depositary
for the depositary shares for cancellation) shall be deemed
to be outstanding. Notice of any such redemption as
described in this Section 4(b) shall be mailed to holders of
the shares of this Series within 30 days after such Dividend
Payment Date in accordance with the provisions of Section
4(c).
(c) At least 30 days but no more than 60 days
prior to the date fixed for redemption of the shares of this
Series in accordance with Section 4(a) or (b) hereof (the
"Call Date"), a written notice will be mailed to each holder
of record (and each beneficial owner to the extent required
by law) of shares of this Series to be redeemed, notifying
each holder of the Corporation's election to redeem such
shares if such redemption is pursuant to Section 4(b),
setting forth the method for determining the amount payable
per share of this Series on the Call Date, stating the Call
Date and calling upon such holder to surrender to the
Corporation on the Call Date at the place designated in such
notice the certificate or certificates representing the
shares called for redemption.
(d) At any time after a notice of redemption has
been given in the manner prescribed in Section 4(a) or (b)
and the amount payable on the date fixed for redemption can
be determined by the Corporation, and prior to the date
fixed for redemption, the Corporation may deposit in trust,
with a bank or trust company identified in the notice of
redemption having capital, surplus and undistributed profits
aggregating at least $50,000,000, an aggregate amount of
funds sufficient for such redemption (including dividends
accrued on the shares of this Series called for redemption
to the date fixed for redemption) for immediate payment in
the appropriate amounts upon surrender of certificates for
such shares. Any interest accrued on such funds shall be
paid to the Corporation from time to time. Such deposit in
trust shall be irrevocable, except that any funds deposited
by the Corporation which are unclaimed at the end of two
years from the date fixed for such redemption shall be paid
over to the Corporation upon its request, and upon such
repayment the holders of the shares so called for redemption
shall look only to the Corporation for payment of the
appropriate amount.
(e) From and after the date of the deposit of
trust funds for the redemption of shares of this Series in
accordance with the provisions of Section 4(d) hereof or, if
no such deposit is made, from and after the date fixed for
redemption (unless the Corporation shall default in making
payment of the amount payable upon such redemption), whether
or not certificates for shares so called for redemption have
been surrendered by the holders thereof as described below,
dividends on the shares of this Series so called for
redemption shall cease to accrue, and such shares shall be
deemed to be no longer outstanding, and all rights of the
holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the amount payable
upon such redemption) shall cease and terminate. Upon
surrender in accordance with the notice of redemption of the
certificates for any shares of this Series so redeemed
(properly endorsed or assigned for transfer if the
Corporation shall so require and the notice shall so state),
the holder thereof shall be entitled to receive payment of
the redemption price plus an amount equal to all accrued and
unpaid dividends as aforesaid.
(f) If the Corporation shall have failed to
redeem all outstanding shares of this Series on the
Mandatory Redemption Date then, until it shall have redeemed
all outstanding Shares of this Series, the Corporation may
not (i) declare, pay or set apart any amounts for dividends
on, or make any other distribution in cash or other property
in respect of, any Junior Stock other than a dividend
payable solely in Junior Stock, (ii) purchase, redeem or
otherwise acquire for value any shares of Junior Stock,
directly or indirectly, other than as a result of a
reclassification, exchange or conversion of one Junior Stock
for or into another Junior Stock, or other than through the
use of proceeds of a substantially contemporaneous sale of
other Junior Stock, (iii) make any payment on account of, or
set aside money for, a sinking or other like fund for the
purchase, redemption or other acquisition for value of any
shares of Junior Stock or (iv) purchase, redeem or otherwise
acquire for value any shares of stock of the Corporation
ranking on a parity with the shares of this Series as to
dividends or distribution of assets upon liquidation,
dissolution or winding up ("Parity Stock"). If the funds
available for such mandatory redemption are insufficient to
redeem all outstanding shares of this Series and any other
series of Parity Stock which the Corporation is then
obligated to redeem or purchase, the total available funds
shall be divided among the shares of this Series and such
other series in proportion to the aggregate amount of
redemption or other purchase obligations with respect to
this Series and such other series.
(g) (i) Within 90 days following each Calculation
Date (as defined below), the Corporation shall be required
to prepare a certificate (a "Corporation Certificate")
setting forth its determination of the Reserve Amount (as
defined below) as of such Calculation Date. If the Reserve
Amount, as shown on the Corporation Certificate prepared
with respect to any Calculation Date is less than the
Aggregate Reserve Requirement (as defined below) as of such
Calculation Date, the Corporation will be required to make
an offer (a "Reserve Coverage Offer") to purchase, out of
funds legally available therefor, at a price equal to the
liquidation preference thereof as of the Purchase Date (as
hereinafter defined), a sufficient number of shares of this
Series and of other Gold Parity Stock (as defined below) (or
the depositary shares, if any, issued with respect thereto)
such that, if all such shares had been repurchased on the
relevant Calculation Date, the Reserve Amount on that date
would have been greater than or equal to the Aggregate
Reserve Requirement on such date. If the Corporation
Certificate prepared with respect to any Calculation Date
shows that the Reserve Amount is less than the Aggregate
Reserve Requirement on such date, the Corporation shall
include in such Certificate its calculation of the number of
shares of this Series (or related depositary shares) and the
number of shares of other Parity Stock (or related
depositary shares) it intends to offer to purchase to
satisfy the foregoing requirements (such number with respect
to any series being referred to as the "Offer Amount" with
respect to such series). The Corporation, in its sole
discretion, may determine the number of shares, if any, of
this Series (or related depositary shares) and the number of
shares, if any, of each other series of Gold Parity Stock
(or related depositary shares) to which a Reserve Coverage
Offer will be made so long as such requirements are
satisfied.
(ii) If required to make a Reserve Coverage
Offer, the Corporation will commence such offer not more
than 60 days after the date of the Corporation Certificate
prepared with respect to the applicable Calculation Date, by
mailing a notice to all holders of record of the shares of
each series included in such Reserve Coverage Offer setting
forth (A) that such notice is being given pursuant to a
Reserve Coverage Offer, (B) the Offer Amount with respect to
such series, (C) the method for determining the amount
payable per share of such series on the Purchase Date, (D)
the last date (the "Purchase Date"), which shall not be less
than 30 nor more 60 days after the date of such notice, by
which a holder must elect whether to accept the Reserve
Coverage Offer, (E) the procedures that such holder must
follow to exercise its rights and (F) the procedures for
withdrawing an election. The Corporation shall also cause a
copy of such notice to be published in The Wall Street
Journal (Eastern Edition) or another daily newspaper of
national circulation.
(iii) Holders of shares of any series electing to
have shares of such series purchased by the Corporation
pursuant to a Reserve Coverage Offer will be required to
surrender the certificates representing such shares, with an
appropriate form duly completed, to the Corporation prior to
the Purchase Date. Holders will be entitled to withdraw an
election by a written notice of withdrawal delivered to the
Corporation prior to the close of business on the Purchase
Date. The notice of withdrawal shall state the number of
shares and certificate numbers to which the notice of
withdrawal relates and the number of shares and certificate
numbers, if any, which remain subject to the election. If
the aggregate number of shares of any series tendered
exceeds the Offer Amount with respect to such series, the
Corporation will select the shares of such series to be
purchased on a pro rata basis as nearly as practicable. The
Corporation shall, as promptly as reasonably practicable
after the Purchase Date, cause payment to be mailed or
delivered to each tendering holder in the amount of the
purchase price, and any unpurchased shares to be returned to
the holder thereof.
(h) If, at the time of the mandatory redemption
on the Mandatory Redemption Date or a Reserve Coverage
Offer, the funds of the Corporation legally available for
redemption or repurchase of the shares of any series are
insufficient to redeem or repurchase such shares, those
funds legally available shall be used to redeem or
repurchase the maximum possible number of shares of such
series, pro rata based upon the number of shares to be
redeemed or delivered for purchase, as the case may be. At
any time thereafter when additional funds of the Corporation
become legally available for such purpose, such funds shall
immediately be used to redeem or purchase, as the case may
be, any additional shares of such series which the
Corporation is obligated to redeem or purchase, as the case
may be, but which it has not so redeemed or purchased.
(i) The Corporation shall not have the right to
redeem shares of this Series pursuant to Section 4(a) or (b)
unless full cumulative dividends for all past dividend
periods shall have been paid or declared and set aside for
payment upon all outstanding shares of this Series and all
outstanding shares of other series of stock of the
Corporation ranking, as to dividends, on a parity with the
shares of this Series.
(j) The Corporation will not consummate or permit
any subsidiary to consummate any transaction involving the
Corporation which would cause the Reserve Amount to fall
below the Aggregate Reserve Requirement immediately after
consummation of such transaction unless the Corporation will
have sufficient legally available funds immediately
following consummation of such transaction to complete any
Reserve Coverage Offer required as a result thereof.
(k) Definitions. For purposes of this Section 4,
the following terms shall have the meanings indicated:
(i) "accrued and unpaid dividends" per share of
this Series (A) upon redemption on the Mandatory Redemption
Date, (B) in the case of any Reserve Coverage Offer, (C) in
the case of any optional redemption and (D) in the case of a
liquidation event, shall be equal to the sum of (x) the
aggregate amount of any accrued and unpaid dividends on such
share through the next preceding Dividend Payment Date
(calculated as provided in Section 3) plus (y) a
proportionate amount of the regular quarterly dividend at
the Dividend Rate for the period from the day following the
immediately preceding Dividend Payment Date through the
redemption date, Purchase Date or date of liquidating
distribution (calculated on the basis of a year of 360 days
consisting of twelve 30-day months) multiplied by the
Reference Gold Price used to calculate the other amounts
payable to holders of the shares of this Series in
connection with such redemption, purchase or liquidation
event. If a quarterly dividend is not declared and paid as
provided in Section 3, the unpaid dividend that shall
cumulate for such Dividend Period will be the amount of the
dividend that would have been payable on the Dividend
Payment Date if such dividend had been timely paid.
(ii) "Aggregate Coverage Requirement" as of any
Calculation Date means the sum of the individual Reserve
Coverage Requirements with respect to each series of Gold
Parity Stock, including this Series.
(iii) "Calculation Date" means (i) December 31 of
each year and (ii) the date of the consummation of each
transaction undertaken by the Corporation or any subsidiary
of the Corporation which would either (a) cause the Reserve
Amount, as estimated by the Corporation, to decrease by 50%
or more from the preceding Calculation Date or (b) cause the
Reserve Amount, as estimated by the Corporation, to fall
below the Aggregate Reserve Requirement on such date.
(iv) "Gold Parity Stock" means any series of
Parity Stock the liquidation preference of which is based on
specified amounts of gold.
(v) "Reference Gold Price", when used to
calculate any amount payable with respect to the shares of
this Series (other than dividends payable on any Dividend
Payment Date other than the Mandatory Redemption Date) or to
purchase any shares of this Series on any date means the
arithmetic average of the London P.M. gold fixing price (or
A.M. gold fixing price if there is no P.M. gold fixing price
on the applicable trading date) for an ounce of gold in the
London bullion market, as published in The Wall Street
Journal (Eastern Edition) (or, if such prices are not
published in The Wall Street Journal (Eastern Edition), as
published in the Financial Times) on each of the twenty
trading days ending on the second trading day prior to (i)
in the case of the mandatory redemption of shares of this
Series, the Mandatory Redemption Date, (ii) in the case of
any Reserve Coverage Offer, the date of commencement
thereof, (iii) in the case of any optional redemption of
shares of this Series, the date fixed for such redemption
and (iv) in the case of a liquidation event, the date 30
days prior to the date fixed for the liquidating
distribution. If for any reason gold is not traded during
any relevant period in the London bullion market or is not
quoted in U.S. dollars in such market, gold will be valued
during such period or portion thereof, as the case may be,
on the basis of trading prices, quoted in U.S. dollars, in
the then principal international trading market for gold as
determined by the Corporation's Board of Directors.
(vi) "Required Coverage Multiplier" means (x) 5.0
with respect to this Series, (y) with respect to any other
series of Gold Parity Stock having the benefit of a
provision requiring an offer similar to the Reserve Coverage
Offer, the multiplier applicable thereto by the terms of
such other series, and (z) 1.0 with respect to any other
series of Gold Parity Stock.
(vii) "Reserve Amount" as of any Calculation Date
means the Corporation's Proportionate Interest in the
estimated proved and probable gold reserves of the
Corporation and of any entity in which the Corporation has a
direct or indirect beneficial ownership interest. The
estimated proved and probable gold reserves shall be
determined based upon evaluation methods generally applied
by the mining industry. The Corporation's "Proportionate
Interest" in any estimated proved and probable gold reserves
shall be the Corporation's direct or indirect beneficial
ownership interest in such reserves, giving effect to
reductions required to reflect any beneficial ownership
interest of any person other than the Corporation in such
reserves.
(viii) "Reserve Coverage Requirement" with
respect to any series of Gold Parity Stock shall mean the
product of (x) the aggregate liquidation preference of all
outstanding shares of such series (expressed in ounces of
gold) times (y) the Required Coverage Multiplier applicable
to such series. With respect to any series with respect to
which depositary shares have been issued, the liquidation
preference of such series shall be determined on the basis
of the number of such depositary shares as are issued and
outstanding as of the applicable Calculation Date (excluding
any depositary shares which have been acquired by the
Corporation on or prior to the date of the preparation of
the Corporation Certificate with respect to such Calculation
Date).
5. Voting Rights. (a) Except for the voting
rights described below and except as otherwise required by
law, the holders of shares of this Series shall not be
entitled to vote on any matter or to receive notice of, or
to participate in, any meeting of the stockholders of the
Corporation. Each share of Preferred Stock of this Series
will be entitled to one vote on matters which holders of
such Series are entitled to vote.
(b) Whenever dividends payable on shares of this
Series shall be in default in an aggregate amount equal to
or exceeding six full quarterly dividends on all shares of
this Series at the time outstanding, the number of directors
then constituting the Board of Directors of the Corporation
shall be increased by two, and holders of shares of this
Series shall, in addition to any other voting rights, have
the right, voting separately as a class together with
holders of all other series of stock of the Company ranking
on a parity with shares of this Series either as to
dividends or the distribution of assets upon liquidation,
dissolution or winding up and upon which like voting rights
have been conferred and are exercisable (such other series
of stock being herein referred to as "Other Voting Stock"),
to elect such two additional directors. In such case, the
Board of Directors will be increased by two directors, and
the holders of shares of this Series (either alone or with
the holders of Other Voting Stock) will have the exclusive
right as members of such class, as described above, to elect
two directors at the next annual meeting of stockholders.
Whenever such right of the holders of shares of this Series
shall have vested, such right may be exercised initially
either at a special meeting of such holders as provided in
Section 5(c) hereof or at any annual meeting of stockholders
held for the purpose of electing directors, and thereafter
at such annual meetings. The right of the holders of shares
of this Series to vote together as a class with the holders
of shares of any Other Voting Stock shall continue until
such time as all dividends accrued on outstanding shares of
this Series to the Dividend Payment Date next preceding the
date of any such determination shall have been paid in full,
or declared and set apart in trust for payment, at which
time the right of the holders of shares of this Series so to
vote shall terminate, except as herein or by law expressly
provided, subject to revesting upon the occurrence of a
subsequent default of the character mentioned above.
(c) At any time when the right of the holders of
shares of this Series to elect directors as provided in
Section 5(b) hereof shall have vested, and if such right
shall not already have been initially exercised, a proper
officer of the Corporation, upon the written request of the
holders of record of at least 10% of the aggregate number of
shares of this Series and shares of any Other Voting Stock
at the time outstanding, addressed to the Secretary of the
Corporation, shall call a special meeting of the holders of
shares of this Series and of such Other Voting Stock for the
purpose of electing directors. Such meeting shall be held
at the earliest practicable date upon the same form of
notice as is required for annual meetings of stockholders at
the place for the holding of annual meetings of stockholders
of the Corporation (or such other suitable place as is
designated by such officer). If such meeting shall not be
called by a proper officer of the Corporation within 20 days
after personal service of such written request upon the
Secretary of the Corporation, or within 20 days after
mailing the same within the United States of America,
addressed to the Secretary of the Corporation at its
principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the
holders of record of at least 10% of the aggregate number of
shares of this Series and shares of any Other Voting Stock
at the time outstanding may designate in writing one of
their number to call such a meeting at the expense of the
Corporation, and such meeting may be called by such person
so designated upon the same form of notice as is required
for annual meetings of stockholders and shall be held at the
place for the holding of annual meetings of stockholders of
the Corporation (or such other suitable place as is
designated by such person). Any holder of shares of this
Series so designated shall have access to the registry books
of the Corporation for the purpose of causing a meeting of
stockholders to be called pursuant to this subsection (c).
Notwithstanding anything to the contrary contained in this
subsection (c), no such special meeting shall be called
during the period within 90 days immediately preceding the
date fixed for the next annual meeting of stockholders of
the Corporation.
(d) At any meeting held for the purpose of
electing directors at which holders of shares of this Series
shall have the right, voting together as a class with
holders of shares of any Other Voting Stock to elect
directors as provided in Section 5(b) hereof, the presence,
in person or by proxy, of the holders of 33 1/3% of the
aggregate number of shares of this Series and shares of such
Other Voting Stock at the time outstanding shall be required
and be sufficient to constitute a quorum of such class for
the election of directors pursuant to such Section 5(b). At
any such meeting or adjournment thereof, (i) the absence of
a quorum of the shares of this Series and shares of such
Other Voting Stock shall not prevent the election of the
directors to be elected otherwise than pursuant to Section
5(b) hereof and (ii) in the absence of a quorum, either of
the shares of this Series and shares of such Other Voting
Stock or of any other shares of stock of the Corporation, or
both, a majority of the holders, present in person or by
proxy, of the class or classes of stock which lack a quorum
shall have the power to adjourn the meeting for the election
of directors whom they are entitled to elect, from time to
time without notice other than announcement at the meeting,
until a quorum shall be present.
(e) During any period when the holders of shares
of this Series shall have the right to vote together as a
class with the holders of shares of any Other Voting Stock
for directors as provided in Section 5(b) hereof, (i) the
directors so elected by such holders shall continue in
office until their successors shall have been elected by
such holders or until termination of the rights of such
holders to vote as a class for directors and (ii) any
vacancies in the Board of Directors shall be filled only by
a majority (even if that be only a single director) of the
remaining directors theretofore elected by the holders of
the class or classes of stock which elected the director
whose office shall have become vacant. Immediately upon
termination of the right of holders of this Series and any
Other Voting Stock to vote as a class for directors, (i) the
term of office of the directors so elected shall terminate
and (ii) the number of directors shall be such number as may
be provided for in the by-laws of the Corporation
irrespective of any increase pursuant to the provisions of
Section 5(b) hereof.
(f) In addition to any other vote required by law,
the Corporation shall not (i) amend, alter or repeal,
whether by merger, consolidation or otherwise, the
provisions of the Certificate of Incorporation (including
this Certificate of Designations) so as to materially and
adversely affect any right, preference, privilege or voting
power of this Series or (ii) create, authorize or issue any
series or class of stock ranking prior, either as to payment
of dividends or distributions of assets upon liquidation,
dissolution or winding up, to this Series, without the
affirmative vote or consent of the holders of at least two-
thirds of the aggregate number of shares of this Series at
the time outstanding, voting as a separate class; provided,
that any increase in the total number of authorized shares
of Class A Common Stock, Special Stock or Preferred Stock,
or the creation, authorization or issuance of any series of
stock ranking, as to dividends or distribution of assets
upon liquidation, dissolution or winding up of the affairs
of the Corporation, on a parity with the shares of this
Series will not be deemed to materially and adversely affect
such rights, preferences, privileges or voting powers;
provided, further, that no class vote of the holders of
shares of this Series shall be required if, at or prior to
the time when the actions described in clause (i) or (ii) of
this Section 5(f) shall become effective, provision is made
in accordance with Section 4 hereof for the redemption of
all shares of this Series at the time outstanding.
6. Preference upon Liquidation. (a) In the event
of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, after payment
or provision for payment of the debts and other liabilities
of the Corporation and of dividends and liquidation
preferences in respect of any other stock of the Corporation
ranking senior to the shares of this Series as to such
payments, the holders of shares of this Series shall be
entitled to receive, out of the remaining net assets of the
Corporation, the Dollar Equivalent Value of 2.0 ounces of
gold in cash for each share of this Series, plus an amount
equal to all dividends (whether or not earned or declared)
accrued and unpaid on each such share up to the date fixed
for distribution, before any distribution shall be made to
or set apart for the holders of any Junior Stock. If, after
payment or provision for payment of the debts and other
liabilities of the Corporation and of dividends and
liquidation preferences in respect of any other stock of the
Corporation ranking senior to the shares of this Series as
to such payments, the remaining net assets of the
Corporation are not sufficient to pay to the holders of
shares of this Series the full amount of their preference
set forth above, then the remaining net assets of the
Corporation shall be divided among and paid to the holders
of shares of this Series, holders of shares of any other
class or series of Preferred Stock, holders of shares of
Special Preference Stock and holders of shares of any other
stock of the Corporation on a parity with this Series as to
dividends and distribution of assets upon liquidation,
dissolution or winding up of the affairs of the Corporation
ratably per share in proportion to the full per share
amounts to which they respectively are entitled. For
purposes of this Section 6(a) and Section 6(b), a
consolidation or merger of the Corporation with one or more
other Corporations or the sale of all or substantially all
of the assets of the Corporation shall not be deemed to be a
voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation.
(b) Subject to the rights of the holders of shares
of any series or class of stock ranking on a parity as to
dividends and distribution of assets upon liquidation,
dissolution or winding up of the affairs of the Corporation,
after payment shall have been made in full to the holders of
this Series as provided in Section 6(a) and this Section
6(b), the holders of any Junior Stock shall, subject to the
respective terms and provisions (if any) applying thereto,
be entitled to receive any and all assets remaining to be
paid or distributed, and shares of this Series shall not be
entitled to share therein.
7. Taxes. The Corporation will pay any and all
documentary, stamp or similar taxes payable to the United
States of America or any political subdivision or taxing
authority thereof or therein in respect of the issue or
delivery of certificates for shares of this Series on
redemption of less than all of the shares represented by any
certificate for such shares surrendered for redemption or
pursuant to a Reserve Coverage Offer; provided, that the
Corporation shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issue
or delivery of certificates for shares of this Series in a
name other than that of the holder of shares of this Series
to be redeemed or repurchased and no such issue or delivery
shall be made unless and until the person requesting such
issue or delivery has paid to the Corporation the amount of
any such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid. The Corporation
extends no protection with respect to any other taxes
imposed in connection with such redemption or repurchase of
shares of this Series.
8. No Other Rights. The shares of this Series
shall not have any relative, participating, optional or
other special rights and powers other than as set forth
herein and other than any which may be provided by law.
IN WITNESS WHEREOF, Freeport-McMoRan Copper & Gold
Inc. has caused its corporate seal to be hereunto affixed
and this Certificate of Designations to be signed by its
Vice President and Treasurer as of this 19th day of January,
1994.
FREEPORT-McMoRan COPPER & GOLD INC.
By: -----------------------------
Name: Robert M. Wohleber
Title: Vice President and
Treasurer
[CORPORATE SEAL]
Attest:
By: -----------------------------
Name: Michael C. Kilanowski
Title: Secretary
====================================================
FREEPORT-McMoRan COPPER & GOLD INC.
and
MELLON SECURITIES TRUST COMPANY,
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
____________
DEPOSIT AGREEMENT
____________
Dated as of January 15, 1994
======================================================
TABLE OF CONTENTS
Page
----
Parties . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
"Certificate of Designations" . . . . . . . . . . . . 1
"Certificate of Incorporation" . . . . . . . . . . . 2
"Company" . . . . . . . . . . . . . . . . . . . . . . 2
"Corporate Office" . . . . . . . . . . . . . . . . . 2
"Deposit Agreement" . . . . . . . . . . . . . . . . . 2
"Depositary" . . . . . . . . . . . . . . . . . . . . 2
"Depositary Share" . . . . . . . . . . . . . . . . . 2
"Depositary's Agent" . . . . . . . . . . . . . . . . 2
"New York Office" . . . . . . . . . . . . . . . . . . 2
"Receipt" . . . . . . . . . . . . . . . . . . . . . . 3
"record holder" . . . . . . . . . . . . . . . . . . . 3
"Registrar" . . . . . . . . . . . . . . . . . . . . . 3
"Securities Act" . . . . . . . . . . . . . . . . . . 3
"Stock" . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND REDEMPTION AND REPURCHASE OF RECEIPTS
SECTION 2.01 Form and Transfer of Receipts . . . . 3
SECTION 2.02 Deposit of Stock; Execution and
Delivery of Receipts in
Respect Thereof . . . . . . . . . . 4
SECTION 2.03 Redemption and Repurchase of Stock . . 5
SECTION 2.04 Register of Transfer of Receipts . . . 8
SECTION 2.05 Combination and Split-ups
of Receipts . . . . . . . . . . . . 8
SECTION 2.06 Surrender of Receipts and Withdrawal
of Stock . . . . . . . . . . . . . 8
SECTION 2.07 Limitations on Execution and Delivery,
Transfer, Split-up, Combination and
Surrender of Receipts and Withdrawal
or Deposit of Stock . . . . . . . . 9
SECTION 2.08 Lost Receipts, etc. . . . . . . . . . 10
SECTION 2.09 Cancellation and Destruction of
Surrendered Receipts . . . . . . . . 10
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.01 Filing Proofs, Certificates and
Other Information . . . . . . . . . 11
SECTION 3.02 Payment of Taxes or Other
Governmental Charges . . . . . . . . 11
SECTION 3.03 Withholding . . . . . . . . . . . . . 11
SECTION 3.04 Representations and Warranties
as to Stock . . . . . . . . . . . . 12
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01 Cash Distributions . . . . . . . . . . 12
SECTION 4.02 Distributions Other Than Cash . . . . 12
SECTION 4.03 Subscription Rights, Preferences
or Privileges . . . . . . . . . . . 13
SECTION 4.04 Notice of Dividends, Fixing of Record
Date for Holders of Receipts . . . . 14
SECTION 4.05 Voting Rights . . . . . . . . . . . . 14
SECTION 4.06 Changes Affecting Stock and
Reclassifications,
Recapitalizations, etc. . . . . . . 15
SECTION 4.07 Reports . . . . . . . . . . . . . . . 15
SECTION 4.08 Lists of Receipt Holders . . . . . . . 16
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01 Maintenance of Offices, Agencies,
Transfer Books by the Depositary;
the Registrar . . . . . . . . . . . 16
SECTION 5.02 Prevention or Delay in Performance
by the Depositary, the Depositary's
Agents, the Registrar or the
Company . . . . . . . . . . . . . . 17
SECTION 5.03 Obligations of the Depositary, the
Depositary's Agents, the Registrar
and the Company . . . . . . . . . . 17
SECTION 5.04 Resignation and Removal of the
Depositary, Appointment of
Successor Depositary . . . . . . . . 19
SECTION 5.05 Corporate Notices and Reports . . . . 20
SECTION 5.06 Deposit of Stock by the Company . . . 21
SECTION 5.07 Indemnification by the Company . . . . 21
SECTION 5.08 Fees, Charges and Expenses . . . . . . 21
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01 Amendment . . . . . . . . . . . . . . 22
SECTION 6.02 Termination . . . . . . . . . . . . . 22
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Counterparts . . . . . . . . . . . . . 23
SECTION 7.02 Exclusive Benefits of Parties . . . . 23
SECTION 7.03 Invalidity of Provisions . . . . . . . 23
SECTION 7.04 Notices . . . . . . . . . . . . . . . 24
SECTION 7.05 Depositary's Agents . . . . . . . . . 24
SECTION 7.06 Holders of Receipts Are Parties . . . 25
SECTION 7.07 Governing Law . . . . . . . . . . . . 25
SECTION 7.08 Headings . . . . . . . . . . . . . . . 25
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . 26
SIGNATURES . . . . . . . . . . . . . . . . . . . . . 26
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . A-1
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of January 15, 1994
among Freeport-McMoRan Copper & Gold Inc., a Delaware
corporation, Mellon Securities Trust Company, a New York
Trust Company, as Depositary, and all holders from time to
time of Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide as
hereinafter set forth in this Deposit Agreement, for the
deposit of shares of the Stock with the Depositary, as agent
for the beneficial owners of the Stock, for the purposes set
forth in this Deposit Agreement and for the issuance
hereunder of the Receipts evidencing Depositary Shares
representing an interest in the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in
the form annexed as Exhibit A to this Deposit Agreement,
with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises
contained herein, it is agreed by and among the parties
hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the
respective terms (in the singular and plural forms of such
terms) used in this Deposit Agreement and the Receipts:
"Certificate of Designations" shall mean the
Certificate of Designations establishing and setting forth
the rights, preferences, privileges and limitations of the
Stock.
"Certificate of Incorporation" shall mean the
Certificate of Incorporation, as amended and restated from
time to time, of the Company.
"Company" shall mean Freeport McMoRan Copper &
Gold Inc., a Delaware corporation, and its successors.
"Corporate Office" shall mean the office of the
Depositary in Ridgefield Park, New Jersey at which at any
particular time its business in respect of matters governed
by this Deposit Agreement shall be administered, which at
the date of this Deposit Agreement is located at
85 Challenger Road.
"Deposit Agreement" shall mean this agreement, as
the same may be amended, modified or supplemented from time
to time.
"Depositary" shall mean Mellon Securities Trust
Company, as Depositary hereunder, and any successor as
Depositary hereunder.
"Depositary Share" shall mean the rights evidenced
by the Receipts executed and delivered hereunder, including
the interests in Stock granted to holders of Receipts
pursuant to the terms and conditions of the Deposit
Agreement. Each Depositary Share shall represent an
interest in 0.05 shares of Stock deposited with the
Depositary hereunder and the same proportionate interest in
any and all other property received by the Depositary in
respect of such share of Stock and held under this Deposit
Agreement. Subject to the terms of this Deposit Agreement,
each record holder of a Receipt evidencing a Depositary
Share or Shares is entitled, proportionately, to all the
rights, preferences and privileges of the Stock represented
by such Depositary Share or Shares, including the dividend,
redemption, voting and liquidation rights contained in the
Certificate of Designations, and to the benefits of all
obligations and duties of the Company in respect of the
Stock under the Certificate of Designations and the
Certificate of Incorporation.
"Depositary's Agent" shall mean an agent appointed
by the Depositary as provided, and for the purposes
specified, in Section 7.05.
"New York Office" shall mean the office maintained
by the Depositary in the Borough of Manhattan, The City of
New York, which at the date of this Deposit Agreement is
located at 120 Broadway.
"Receipt" shall mean a Depositary Receipt executed
and delivered hereunder, in substantially the form of
Exhibit A hereto, evidencing Depositary Share or Shares, as
the same may be amended from time to time in accordance with
the provisions hereof.
"record holder" or "holder" as applied to a
Receipt shall mean the person in whose name a Receipt is
registered on the books maintained by or on behalf of the
Depositary for such purpose.
"Registrar" shall mean any bank or trust company
appointed to register ownership and transfers of Receipts as
herein provided.
"Securities Act" shall mean the Securities Act of
1933, as amended.
"Stock" shall mean shares of the Company's Gold-
Denominated Preferred Stock, Series II, par value $0.10 per
share.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER
AND REDEMPTION AND REPURCHASE OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts.
Receipts shall be engraved or printed or lithographed on
steel-engraved borders and shall be substantially in the
form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and
omissions, as hereinafter provided. Receipts shall be
executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary; provided, however,
that such signature may be a facsimile if a Registrar (other
than the Depositary) shall have countersigned the Receipts
by manual signature of a duly authorized officer of the
Registrar. No Receipt shall be entitled to any benefits
under this Deposit Agreement or be valid or obligatory for
any purpose unless it shall have been executed as provided
in the preceding sentence. The Depositary shall record on
its books each Receipt executed as provided above and
delivered as hereinafter provided. Receipts bearing the
facsimile signature of anyone who was at any time a duly
authorized officer of the Depositary shall bind the
Depositary, notwithstanding that such officer has ceased to
hold such office prior to the delivery of such Receipts.
Receipts may be issued in denominations of any
number of whole Depositary Shares. All Receipts shall be
dated the date of their execution.
Receipts may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Deposit Agreement
as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and
regulations of any securities exchange upon which the Stock
or the Depositary Shares may be listed or to conform with
any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Receipts
are subject by reason of the date of issuance of the Stock
or otherwise.
Title to any Receipt (and to the Depositary Shares
evidenced by such Receipt) that is properly endorsed or
accompanied by a properly executed instrument of transfer
shall be transferable by delivery with the same effect as in
the case of investment securities in general; provided,
however, that the Depositary may, notwithstanding any notice
to the contrary, treat the record holder thereof at such
time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of
dividends or other distributions or to any notice provided
for in this Deposit Agreement and for all other purposes.
SECTION 2.02. Deposit of Stock; Execution and
Delivery of Receipts in Respect Thereof. Subject to the
terms and conditions of this Deposit Agreement, the Company
or any holder of Stock may deposit such Stock under this
Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Stock to be deposited,
properly endorsed or accompanied, if required by the
Depositary, by a properly executed instrument of transfer in
form satisfactory to the Depositary, together with (i) all
such certifications as may be required by the Depositary in
accordance with the provisions of this Deposit Agreement and
(ii) a written order of the Company or such holder, as the
case may be, directing the Depositary to execute and deliver
to or upon the written order of the person or persons stated
in such order a Receipt or Receipts for the number of
Depositary Shares representing such deposited Stock.
Upon receipt by the Depositary of a certificate or
certificates for Stock to be deposited hereunder, together
with the other documents specified above, the Depositary
shall, as soon as transfer and registration can be
accomplished, present such certificate or certificates to
the registrar and transfer agent of the Stock for transfer
and registration in the name of the Depositary or its
nominee of the Stock being deposited. Deposited Stock shall
be held by the Depositary in an account to be established by
the Depositary at the Corporate Office.
Upon receipt by the Depositary of a certificate or
certificates for Stock to be deposited hereunder, together
with the other documents specified above, the Depositary,
subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order
of the person or persons named in the written order
delivered to the Depositary referred to in the first
paragraph of this Section 2.02, a Receipt or Receipts for
the number of whole Depositary Shares representing the Stock
so deposited and registered in such name or names as may be
requested by such person or persons. The Depositary shall
execute and deliver such Receipt or Receipts at the New York
Office, except that, at the request, risk and expense of any
person requesting such delivery and for the account of such
person, such delivery may be made at such other place as may
be designated by such person. In each case, delivery will
be made only upon payment by such person to the Depositary
of all taxes and other governmental charges and any fees
payable in connection with such deposit and the transfer of
the deposited Stock.
The Company shall deliver to the Depositary from
time to time such quantities of Receipts as the Depositary
may request to enable the Depositary to perform its
obligations under this Deposit Agreement.
SECTION 2.03. Redemption and Repurchase of Stock.
Whenever the Company shall redeem shares of Stock in
accordance with the Certificate of Designations, it shall
(unless otherwise agreed in writing with the Depositary)
give the Depositary in its capacity as Depositary not less
than 5 business days' prior notice of the proposed date of
the mailing of a notice of redemption of Stock and the
simultaneous redemption of the Depositary Shares
representing the Stock to be redeemed and of the number of
such shares of Stock held by the Depositary to be redeemed.
The Depositary shall, as directed by the Company in writing,
mail, first class postage prepaid, notice of the redemption
of Stock and the proposed simultaneous redemption of the
Depositary Shares representing the Stock to be redeemed not
less than 30 and not more than 60 days prior to the date
fixed for redemption of such Stock and Depositary Shares, to
the record holders of the Receipts evidencing the Depositary
Shares to be so redeemed at the addresses of such holders as
the same appear on the records of the Depositary.
Notwithstanding the foregoing, neither failure to mail or
publish any such notice to one or more such holders nor any
defect in any notice shall affect the sufficiency of the
proceedings for redemption. The Company shall provide the
Depositary with such notice, and each such notice shall
state: the method for determining the amount payable per
Depositary Share; the redemption date; the number of
Depositary Shares to be redeemed; and shall call upon each
holder of Depositary Shares to surrender, on the redemption
date and at the place or places designated by the Company,
the Receipts evidencing Depositary Shares to be redeemed.
On the date of any such redemption the Depositary shall
surrender the certificate or certificates held by the
Depositary evidencing the number of shares of Stock to be
redeemed in the manner specified in the notice of redemption
of Stock provided by the Company pursuant to the Certificate
of Designations. The Depositary shall, thereafter, redeem
the number of Depositary Shares representing such redeemed
Stock upon the surrender of Receipts evidencing such
Depositary Shares in the manner provided in the notice sent
to record holders of Receipts.
Notice having been mailed by the Depositary as
aforesaid, from and after the redemption date (unless the
Company shall have failed to redeem the shares of Stock to
be redeemed by it upon the surrender of the certificate or
certificates therefor by the Depositary as described in the
preceding paragraph), the Depositary Shares called for
redemption shall be deemed no longer to be outstanding and
all rights of the holders of Receipts evidencing such
Depositary Shares (except the right to receive the cash
payable upon redemption upon surrender of such Receipts)
shall, to the extent of such Depositary Shares, cease and
terminate. The foregoing shall be subject further to the
terms and conditions of the Certificate of Designations.
If fewer than all of the Depositary Shares
evidenced by a Receipt are called for redemption, the
Depositary will deliver to the holder of such Receipt upon
its surrender to the Depositary, together with the
redemption price (to be paid in the form of cash) and all
accrued and unpaid dividends to and including the date fixed
for redemption payable in respect of the Depositary Shares
called for redemption, a new Receipt evidencing the
Depositary Shares evidenced by such prior Receipt and not
called for redemption.
The Depositary shall not be required (a) to issue,
transfer or exchange any Receipts for a period beginning at
the opening of business 15 days next preceding any selection
of Depositary Shares and Stock to be redeemed and ending at
the close of business on the day of the mailing of notice of
redemption of Depositary Shares or (b) to transfer or
exchange for another Receipt any Receipt evidencing
Depositary Shares called or being called for redemption, in
whole or in part except as provided in the immediately
preceding paragraph of this Section 2.03.
Whenever the Company shall be required to make an
offer to repurchase Depositary Shares representing Stock in
accordance with the Certificate of Designations, it shall
give the Depositary in its capacity as Depositary not less
than 5 business days' prior notice of the required date of
the mailing of a notice of the repurchase offer. The
Depositary shall, as directed by the Company in writing,
mail, first class postage prepaid, notice of the relevant
terms of the repurchase offer, as provided by the Company,
including: (i) that such notice is being given pursuant to a
repurchase offer, (ii) the number of Depositary Shares and
Stock for which the offer is being made, (iii) the method
for determining the amount payable per Depositary Share,
(iv) the last date, which shall not be less than 30 nor more
than 60 days after the date of such notice, by which a
holder must elect to accept the repurchase offer, (v) the
procedures that such holder must follow to exercise its
rights and (vi) the procedures for withdrawing an election.
The Depositary shall, thereafter, receive from
each holder electing to have Depositary Shares repurchased
pursuant to the repurchase offer in accordance with the
instructions in the notice, the holder's Depositary Share
certificates, with an appropriate form duly completed prior
to the repurchase date. Holders will be entitled to
withdraw an election by a written notice of withdrawal
delivered to the Depositary prior to the close of business
on the repurchase date. The notice of withdrawal shall
state the number of Depositary Shares and the certificate
numbers to which the notice of withdrawal relates and the
number of Depositary Shares and certificate numbers, if any,
which remain subject to election. In case the aggregate
number of Depositary Shares offered for repurchase by the
holders exceeds the amount of Depositary Shares which the
Company has offered to repurchase pursuant to the repurchase
offer, the Depositary Shares to be repurchased shall be
selected by the Depositary on a pro rata basis at the
direction of the Company. The Depositary shall, at the
direction of the Company, cause payment to be mailed or
delivered to each tendering holder as promptly as reasonably
practicable after the repurchase date, in the amount of the
repurchase price, and any unpurchased Depositary Shares to
be returned to the holder thereof. The foregoing is subject
further to the terms and conditions of the Certificate of
Designations.
SECTION 2.04. Register of Transfer of Receipts.
Subject to the terms and conditions of this Deposit
Agreement, the Depositary shall register on its books from
time to time transfers of Receipts upon any surrender
thereof at the Corporate Office, the New York Office or such
other office as the Depositary may designate for such
purpose, by the record holder in person or by a duly
authorized attorney, properly endorsed or accompanied by a
properly executed instrument of transfer, together with
evidence of the payment of any transfer taxes as may be
required by law. Upon such surrender, the Depositary shall
execute a new Receipt or Receipts and deliver the same to or
upon the order of the person entitled thereto evidencing the
same aggregate number of Depositary Shares evidenced by the
Receipt or Receipts surrendered.
SECTION 2.05. Combination and Split-ups of
Receipts. Upon surrender of a Receipt or Receipts at the
Corporate Office, the New York Office or such other office
as the Depositary may designate for the purpose of effecting
a split-up or combination of Receipts, subject to the terms
and conditions of this Deposit Agreement, the Depositary
shall execute and deliver a new Receipt or Receipts in the
authorized denominations requested evidencing the same
aggregate number of Depositary Shares evidenced by the
Receipt or Receipts surrendered; provided, however, that the
Depositary shall not issue any Receipt evidencing a
fractional Depositary Share.
SECTION 2.06. Surrender of Receipts and
Withdrawal of Stock. (a) Except as provided in Section
2.06(b), no holder of a Receipt or Receipts shall have the
right to withdraw any of the shares of Stock represented by
such Receipts.
(b) Notwithstanding Section 2.06(a), the Company
shall have the right to withdraw any or all of the Stock
(but only in whole shares of Stock) represented by the
Depositary Shares and all money and other property, if any,
represented by such Depositary Shares by surrendering the
Receipt or Receipts evidencing such Depositary Shares at the
Corporate Office, the New York Office or at such other
office as the Depositary may designate for such withdrawals
(and cancellation of the surrendered Receipts as provided in
Section 2.09). After such surrender, without unreasonable
delay, the Depositary shall deliver to the Company the whole
number of shares of Stock and all such money and other
property, if any, represented by the Depositary Shares
evidenced by the Receipt or Receipts so surrendered for
withdrawal. If the Receipt or Receipts delivered by the
Company to the Depositary in connection with such withdrawal
shall evidence a number of Depositary Shares in excess of
the number of whole Depositary Shares representing the whole
number of shares of Stock to be withdrawn, the Depositary
shall at the same time, in addition to such whole number of
shares of Stock and such money and other property, if any,
to be withdrawn, deliver to the Company, or (subject to
Section 2.04) upon its order, a new Receipt or Receipts
evidencing such excess number of whole Depositary Shares.
Delivery of the Stock and such money and other
property being withdrawn may be made by the delivery of such
certificates, documents of title and other instruments as
the Depositary may deem appropriate, which, if required by
the Depositary, shall be properly endorsed or accompanied by
proper instruments of transfer.
The Depositary shall deliver the Stock and the
money and other property, if any, represented by the
Depositary Shares evidenced by Receipts surrendered for
withdrawal, without unreasonable delay, at the office at
which such Receipts were surrendered, except that, at the
request, risk and expense of the Company such delivery may
be made, without unreasonable delay, at such other place as
may be designated by the Company.
For purposes of determining the number of
Depositary Shares outstanding on any dividend payment date
for purposes of Section 4(b) of the Certificate of
Designations, the Receipts representing Depositary Shares
acquired by the Company on or prior to such dividend payment
date and not theretofore delivered to the Depositary for
withdrawal and cancellation shall be deemed to be
outstanding.
SECTION 2.07. Limitations on Execution and
Delivery, Transfer, Split-up, Combination and Surrender of
Receipts and Withdrawal or Deposit of Stock. As a condition
precedent to the execution and delivery, registration of
transfer, split-up, combination, or surrender of any
Receipt, the delivery of any distribution thereon or deposit
of Stock, the Depositary, any of the Depositary's Agents or
the Company may require any or all of the following: (i)
payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made
such payment, the reimbursement to it) of any tax or other
governmental charge with respect thereto (including any such
tax or charge with respect to the Stock being deposited or
withdrawn or with respect to property of the Company being
issued upon redemption); (ii) production of proof
satisfactory to it as to the identity and genuineness of any
signature; and (iii) compliance with such reasonable
regulations, if any, as the Depositary or the Company may
establish not inconsistent with the provisions of this
Deposit Agreement.
The deposit of Stock may be refused, or the
registration of transfer, split-up, combination or surrender
of outstanding Receipts and the withdrawal of deposited
Stock may be suspended (i) during any period when the
register of stockholders of the Company is closed, (ii) if
any such action is deemed necessary or advisable by the
Depositary, any of the Depositary's Agents or the Company at
any time or from time to time because of any requirement of
law or of any government or governmental body or commission,
or under any provision of this Deposit Agreement, or (iii)
with the approval of the Company, for any other reason.
Without limitation of the foregoing, the Depositary shall
not knowingly accept for deposit under this Deposit
Agreement any shares of Stock that are required to be
registered under the Securities Act unless a registration
statement under the Securities Act is in effect as to such
shares of Stock.
SECTION 2.08. Lost Receipts, etc. In case any
Receipt shall be mutilated or destroyed or lost or stolen,
the Depositary shall execute and deliver a Receipt of like
form and tenor in exchange and substitution for such
mutilated Receipt or in lieu of and in substitution for such
destroyed, lost or stolen Receipt unless the Depositary has
notice that such Receipt has been acquired by a bona fide
purchaser; provided, however, that the holder thereof
provides the Depositary with (i) evidence satisfactory to
the Depositary of such destruction, loss or theft of such
Receipt, of the authenticity thereof and of his ownership
thereof, (ii) reasonable indemnification satisfactory to the
Depositary or the payment of any charges incurred by the
Depositary in obtaining insurance in lieu of such
indemnification and (iii) payment of any expense (including
fees, charges and expenses of the Depositary) in connection
with such execution and delivery.
SECTION 2.09. Cancellation and Destruction of
Surrendered Receipts. All Receipts surrendered to the
Depositary or any Depositary's Agent shall be cancelled by
the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such
Receipts so canceled.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and
Other Information. Any person presenting Stock for deposit
or any holder of a Receipt may be required from time to time
to file such proof of residence or other information, to
execute such certificates and to make such representations
and warranties as the Depositary or the Company may
reasonably deem necessary or proper. The Depositary or the
Company may withhold or delay the delivery of any Receipt,
the registration of transfer or redemption of any Receipt,
the withdrawal of the Stock represented by the Depositary
Shares evidenced by any Receipt or the distribution of any
dividend or other distribution until such proof or other
information is filed, such certificates are executed or such
representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other
Governmental Charges. If any tax or other governmental
charge shall become payable by or on behalf of the
Depositary with respect to (i) any Receipt, (ii) the
Depositary Shares evidenced by such Receipt, (iii) the Stock
(or fractional interest therein) or other property
represented by such Depositary Shares, or (iv) any
transaction referred to in Section 4.06, such tax (including
transfer, issuance or acquisition taxes, if any) or
governmental charge shall be payable by the holder of such
Receipt, who shall pay the amount thereof to the Depositary.
Until such payment is made, registration or transfer of any
Receipt or any split-up or combination thereof or any
withdrawal of the Stock or money or other property, if any,
represented by the Depositary Shares evidenced by such
Receipt may be refused, any dividend or other distribution
may be withheld and any part or all of the Stock or other
property represented by the Depositary Shares evidenced by
such Receipt may be sold for the account of the holder
thereof (after attempting by reasonable means to notify such
holder prior to such sale). Any dividend or other
distribution so withheld and the proceeds of any such sale
may be applied to any payment of such tax or other
governmental charge, the holder of such Receipt remaining
liable for any deficiency.
SECTION 3.03. Withholding. The Depositary shall
act as the tax withholding agent for any payments,
distributions made with respect to the Depositary Shares and
Receipts, and the Stock. The Depositary shall be
responsible with respect to the Securities for the timely
(i) collection and deposit of any required withholding or
backup withholding tax, and (ii) filing of any information
returns or other documents with federal (and other
applicable) taxing authorities.
SECTION 3.04. Representations and Warranties as
to Stock. In the case of the initial deposit of the Stock,
the Company and, in the case of subsequent deposits thereof,
each person so depositing Stock under this Deposit Agreement
shall be deemed thereby to represent and warrant that such
Stock and each certificate therefor are valid and that the
person making such deposit is duly authorized to do so.
Such representations and warranties shall survive the
deposit of the Stock and the issuance of Receipts therefor.
ARTICLE IV
THE STOCK, NOTICES
SECTION 4.01. Cash Distributions. Whenever the
Depositary shall receive any cash dividend or other cash
distribution on the Stock, the Depositary shall, subject to
Section 3.02, distribute to record holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts
of such sum as are, as nearly as practicable, in proportion
to the respective numbers of Depositary Shares evidenced by
the Receipts held by such holders; provided, however, that
in case the Company or the Depositary shall be required by
law to withhold and does withhold from any cash dividend or
other cash distribution in respect of the Stock an amount on
account of taxes, the amount made available for distribution
or distributed in respect of Depositary Shares shall be
reduced accordingly. The Depositary shall distribute or
make available for distribution, as the case may be, only
such amount, however, as can be distributed without
attributing to any owner of Depositary Shares a fraction of
one cent and any balance not so distributable shall be held
by the Depositary (without liability for interest thereon)
and shall be added to and be treated as part of the next sum
received by the Depositary for distribution to record
holders of Receipts then outstanding.
SECTION 4.02. Distributions Other Than Cash.
Whenever the Depositary shall receive any distribution other
than cash, rights, preferences or privileges upon the Stock,
the Depositary shall, subject to Section 3.02, distribute to
record holders of Receipts on the record date fixed pursuant
to Section 4.04 such amounts of the securities or property
received by it as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders, in any
manner that the Depositary and the Company may deem
equitable and practicable for accomplishing such
distribution. If, in the opinion of the Company after
consultation with the Depositary, such distribution cannot
be made proportionately among such record holders, or if for
any other reason (including any tax withholding or
securities law requirement), the Depositary deems, after
consultation with the Company, such distribution not to be
feasible, the Depositary may, with the approval of the
Company which approval shall not be unreasonably withheld,
adopt such method as it deems equitable and practicable for
the purpose of effecting such distribution, including the
sale (at public or private sale) of the securities or
property thus received, or any part thereof, at such place
or places and upon such terms as it may deem proper. The
net proceeds of any such sale shall, subject to Section
3.02, be distributed or made available for distribution, as
the case may be, by the Depositary to record holders of
Receipts as provided by Section 4.01 in the case of a
distribution received in cash.
SECTION 4.03. Subscription Rights, Preferences or
Privileges. If the Company shall at any time offer or cause
to be offered to the persons in whose names Stock is
registered on the books of the Company any rights,
preferences or privileges to subscribe for or to purchase
any securities or any rights, preferences or privileges of
any other nature, such rights, preferences or privileges
shall in each such instance be made available by the
Depositary to the record holders of Receipts in such manner
as the Company shall instruct (including by the issue to
such record holders of warrants representing such rights,
preferences or privileges); provided, however, that (a) if
at the time of issue or offer of any such rights,
preferences or privileges the Company determines and
instructs the Depositary that it is not lawful or feasible
to make such rights, preferences or privileges available to
some or all holders of Receipts (by the issue of warrants or
otherwise) or (b) if and to the extent instructed by holders
of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, in
each case, and if applicable laws or the terms of such
rights, preferences or privileges so permit, sell such
rights, preferences or privileges of such holders at public
or private sale, at such place or places and upon such terms
as it may deem proper. The net proceeds of any such sale
shall be distributed by the Depositary to the record holders
of Receipts entitled thereto as provided by Section 4.01 in
the case of a distribution received in cash.
If registration under the Securities Act of the
securities to which any rights, preferences or privileges
relate is required in order for holders of Receipts to be
offered or sold such securities, the Company shall promptly
file a registration statement pursuant to the Securities Act
with respect to such rights, preferences or privileges and
securities and use its best efforts and take all steps
available to it to cause such registration statement to
become effective sufficiently in advance of the expiration
of such rights, preferences or privileges to enable such
holders to exercise such rights, preferences or privileges.
In no event shall the Depositary make available to the
holders of Receipts any right, preference or privilege to
subscribe for or to purchase any securities unless and until
such registration statement shall have become effective or
unless the offering and sale of such securities to such
holders are exempt from registration under the provisions of
the Securities Act.
If any other action under the law of any
jurisdiction or any governmental or administrative
authorization, consent or permit is required in order for
such rights, preferences or privileges to be made available
to holders of Receipts, the Company agrees with the
Depositary that the Company will use its reasonable best
efforts to take such action or obtain such authorization,
consent or permit sufficiently in advance of the expiration
of such rights, preferences or privileges to enable such
holders to exercise such rights, preferences or privileges.
SECTION 4.04. Notice of Dividends, Fixing of
Record Date for Holders of Receipts. Whenever (i) any cash
dividend or other cash distribution shall become payable, or
any distribution other than cash shall be made, or any
rights, preferences or privileges shall at any time be
offered, with respect to the Stock, or (ii) the Depositary
shall receive notice of any meeting at which holders of
Stock are entitled to vote or of which holders of Stock are
entitled to notice or any election on the part of the
Company to call for the redemption of, any shares of Stock,
the Depositary shall in each such instance fix a record date
(which shall be the same date as the record date fixed by
the Company with respect to the Stock) for the determination
of the holders of Receipts (x) who shall be entitled to
receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof, or (y)
who shall be entitled to give instructions for the exercise
of voting rights at any such meeting or to receive notice of
such meeting or of such redemption.
SECTION 4.05. Voting Rights. Upon receipt of
notice of any meeting at which the holders of Stock are
entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of
Receipts a notice, which shall be provided by the Company
and which shall contain (i) such information as is contained
in such notice of meeting, (ii) a statement that the holders
of Receipts at the close of business on a specified record
date fixed pursuant to Section 4.04 will be entitled,
subject to any applicable provision of law, the Certificate
of Incorporation or the Certificate of Designations, to
instruct the Depositary as to the exercise of the voting
rights pertaining to the Stock represented by their
respective Depositary Shares and (iii) a brief statement as
to the manner in which such instructions may be given. Upon
the written request of a holder of a Receipt on such record
date, the Depositary shall endeavor insofar as practicable
to vote or cause to be voted the Stock represented by the
Depositary Shares evidenced by such Receipt in accordance
with the instructions set forth in such request. The
Company hereby agrees to take all reasonable action that may
be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be
voted. In the absence of specific instructions from the
holder of a Receipt, the Depositary will abstain from voting
to the extent of the Stock represented by the Depositary
Shares evidenced by such Receipt.
SECTION 4.06. Changes Affecting Stock and
Reclassifications, Recapitalizations, etc. Upon any
split-up, consolidation or any other reclassification of
Stock, or upon any recapitalization, reorganization, merger,
amalgamation or consolidation affecting the Company or to
which it is a party or sale of all or substantially all of
the Company's assets, the Depositary shall treat any shares
of stock or other securities or property (including cash)
that shall be received by the Depositary in exchange for or
in respect of the Stock as new deposited property under this
Deposit Agreement, and Receipts then outstanding shall
thenceforth represent the proportionate interests of holders
thereof in the new deposited property so received in
exchange for or in respect of such Stock. In any such case
the Depositary may, in its discretion, with the approval of
the Company, execute and deliver additional Receipts, or may
call for the surrender of all outstanding Receipts to be
exchanged for new Receipts specifically describing such new
deposited property.
SECTION 4.07. Reports. The Company or, at the
option of the Company, the Depositary shall forward to the
holders of Receipts any reports and communications received
from the Company that are received by the Depositary as the
holder of Stock.
SECTION 4.08. Lists of Receipt Holders. Promptly
upon request from time to time by the Company, the
Depositary shall furnish to it a list, as of a recent date,
of the names, addresses and holdings of Depositary Shares of
all persons in whose names Receipts are registered on the
books of the Depositary. At the expense of the Company,
the Company shall have the right to inspect transfer and
registration records of the Depositary, any Depositary's
Agent or the Registrar, take copies thereof and require the
Depositary, any Depositary's Agent or the Registrar to
supply copies of such portions of such records as the
Company may request.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies,
Transfer Books by the Depositary; the Registrar. Upon
execution of this Deposit Agreement in accordance with its
terms, the Depositary shall maintain (i) at the New York
Office facilities for the execution and delivery,
registration, registration of transfer, surrender, split-up,
combination and redemption of Receipts and deposit and
withdrawal of Stock and (ii) at the Corporate Office and at
the offices of the Depositary's Agents, if any, facilities
for the delivery, registration, registration of transfer,
surrender, split-up, combination, and redemption of Receipts
and deposit and withdrawal of Stock, all in accordance with
the provisions of this Deposit Agreement.
The Depositary, acting as transfer agent and
Registrar, shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all
reasonable times shall be open for inspection by the record
holders of Receipts; provided that any such holder
requesting to exercise such right shall certify to the
Depositary that such inspection shall be for a proper
purpose reasonably related to such person's interest as an
owner of Depositary Shares. The Depositary shall consult
with the Company upon receipt of any request for inspection.
The Depositary may close such books, at any time or from
time to time, when deemed expedient by it in connection with
the performance of its duties hereunder.
If the Receipts or the Depositary Shares evidenced
thereby or the Stock represented by such Depositary Shares
shall be listed on one or more stock exchanges, the
Depositary shall, with the approval of the Company, appoint
a Registrar for registry of such Receipts or Depositary
Shares in accordance with the requirements of such exchange
or exchanges. Such Registrar (which may be the Depositary
if so permitted by the requirements of such exchange or
exchanges) may be removed and a substitute registrar
appointed by the Depositary upon the request or with the
approval of the Company. In addition, if the Receipts, such
Depositary Shares or such Stock are listed on one or more
stock exchanges, the Depositary will, at the request of the
Company, arrange such facilities for the delivery,
registration, registration of transfer, surrender, split-up,
combination or redemption of such Receipts, such Depositary
Shares or such Stock as may be required by law or applicable
stock exchange regulations.
SECTION 5.02. Prevention or Delay in Performance
by the Depositary, the Depositary's Agents, the Registrar or
the Company. Neither the Depositary nor any Depositary's
Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt, if by reason of any
provision of any present or future law or regulation
thereunder of the United States of America or of any other
governmental authority or, in the case of the Depositary,
the Registrar or any Depositary's Agent, by reason of any
provision, present or future, of the Certificate of
Incorporation or the Certificate of Designations or, in the
case of the Company, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or
other circumstances beyond the control of the relevant
party, the Depositary, any Depositary's Agent, the Registrar
or the Company shall be prevented or forbidden from doing or
performing any act or thing that the terms of this Deposit
Agreement provide shall be done or performed; nor shall the
Depositary, any Depositary's Agent, the Registrar or the
Company incur any liability to any holder of a Receipt (i)
by reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that the
terms of this Deposit Agreement provide shall or may be done
or performed, or (ii) by reason of any exercise of, or
failure to exercise, any discretion provided for in this
Deposit Agreement except, in the case of the Depositary, any
Depositary's Agent or the Registrar, if any such exercise or
failure to exercise discretion is caused by its negligence
or bad faith.
SECTION 5.03. Obligations of the Depositary, the
Depositary's Agents, the Registrar and the Company. The
Company assumes no obligation and shall be subject to no
liability under this Deposit Agreement or the Receipts to
holders or other persons, except to perform in good faith
such obligations as are specifically set forth and
undertaken by it to perform in this Deposit Agreement. Each
of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability
under this Deposit Agreement or the Receipts to holders or
other persons, except to perform such obligations as are
specifically set forth and undertaken by it to perform in
this Deposit Agreement without negligence or bad faith.
Neither the Depositary nor any Depositary's Agent
nor the Registrar nor the Company shall be under any
obligation to appear in, prosecute or defend any action,
suit or other proceeding with respect to Stock, Depositary
Shares or Receipts that in its opinion may involve it in
expense or liability, unless indemnity satisfactory to it
against all expense and liability be furnished as often as
may be required.
Neither the Depositary nor any Depositary's Agent
nor the Registrar nor the Company shall be liable for any
action or any failure to act by it in reliance upon the
advice of or information from legal counsel, accountants,
any person presenting Stock for deposit, any holder of a
Receipt or any other person believed by it in good faith to
be competent to give such advice or information. The
Depositary, any Depositary's Agent, the Registrar and the
Company may each rely and shall each be protected in acting
upon any written notice, request, direction or other
document believed by it to be genuine and to have been
signed or presented by the proper party or parties.
The Depositary, the Registrar and any Depositary's
Agent may own and deal in any class of securities of the
Company and its affiliates and in Receipts or Depositary
Shares. The Depositary may also act as transfer agent or
registrar of any of the securities of the Company and its
affiliates.
It is intended that neither the Depositary nor any
Depositary's Agent nor the Registrar shall be deemed to be
an "issuer" of the Stock, the Depositary Shares, or the
Receipts or other securities issued upon exchange or
redemption of the Stock under the federal securities laws or
applicable state securities laws, it being expressly
understood and agreed that the Depositary and any
Depositary's Agent and the Registrar are acting only in a
ministerial capacity; provided, however, that the Depositary
agrees to comply with all information reporting and
withholding requirements applicable to it under law or this
Deposit Agreement in its capacity as Depositary.
Neither the Depositary (or its officers,
directors, employees or agents) nor any Depositary's Agent
nor the Registrar makes any representation or has any
responsibility as to the validity of the Registration
Statement pursuant to which the Depositary Shares are
registered under the Securities Act, the Stock, the
Depositary Shares or any instruments referred to therein or
herein, or as to the correctness of any statement made
therein or herein; provided, however, that the Depositary is
responsible for its representations in this Deposit
Agreement.
The Depositary assumes no responsibility for the
correctness of the description that appears in the Receipts,
which can be taken as a statement of the Company summarizing
certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the
Receipts, the Depositary makes no warranties or
representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the
Depositary hereunder or of the Depositary Shares, as to the
validity or sufficiency of this Deposit Agreement, as to the
value of the Depositary Shares or as to any right, title or
interest of the record holders of Receipts in and to the
Depositary Shares except that the Depositary hereby
represents and warrants as follows: (i) the Depositary has
been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its
incorporation, with full power, authority and legal right
under such law to execute, deliver and carry out the terms
of this Deposit Agreement; (ii) this Deposit Agreement has
been duly authorized, executed and delivered by the
Depositary; and (iii) this Deposit Agreement constitutes a
valid and binding obligation of the Depositary, enforceable
against the Depositary in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting
enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). The Depositary shall not
be accountable for the use or application by the Company of
the Depositary Shares or the Receipts or the proceeds
thereof.
SECTION 5.04. Resignation and Removal of the
Depositary, Appointment of Successor Depositary. The
Depositary may at any time resign as Depositary hereunder by
written notice via registered mail of its election to do so
delivered to the Company, such resignation to take effect
upon the appointment of a successor depositary and its
acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the
Company by written notice of such removal delivered to the
Depositary, such removal to take effect upon the appointment
of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting
hereunder shall resign or be removed, the Company shall,
within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a
successor depositary, which shall be a bank or trust
company, or an affiliate of a bank or trust company, having
its principal office in the United States of America and
having a combined capital and surplus of at least
$50,000,000. If a successor depositary shall not have been
appointed in 60 days, the resigning or removed Depositary
may petition a court of competent jurisdiction to appoint a
successor depositary. Every successor depositary shall
execute and deliver to its predecessor and to the Company an
instrument in writing accepting its appointment hereunder,
and thereupon such successor depositary, without any further
act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor and for
all purposes shall be the Depositary under this Deposit
Agreement, and such predecessor, upon payment of all sums
due it and on the written request of the Company, shall
promptly execute and deliver an instrument transferring to
such successor all rights and powers of such predecessor
hereunder, shall duly assign, transfer and deliver all
rights, title and interest in the Stock and any moneys or
property held hereunder to such successor and shall deliver
to such successor a list of the record holders of all
outstanding Receipts. Any successor depositary shall
promptly mail notice of its appointment to the record
holders of Receipts.
Any corporation into or with which the Depositary
may be merged, consolidated or converted shall be the
successor of such Depositary without the execution or filing
of any document or any further act. Such successor
depositary may execute the Receipts either in the name of
the predecessor depositary or in the name of the successor
depositary.
SECTION 5.05. Corporate Notices and Reports. The
Company agrees that it will deliver to the Depositary, and
the Depositary will, promptly after receipt thereof,
transmit to the record holders of Receipts, in each case at
the address recorded in the Depositary's books, copies of
all notices and reports (including financial statements)
required by law, by the rules of any national securities
exchange upon which the Stock, the Depositary Shares or the
Receipts are listed or by the Certificate of Incorporation
and the Certificate of Designations to be furnished by the
Company to holders of Stock. Such transmission will be at
the Company's expense and the Company will provide the
Depositary with such number of copies of such documents as
the Depositary may reasonably request. In addition, the
Depositary will transmit to the record holders of Receipts
at the Company's expense such other documents as may be
requested by the Company.
SECTION 5.06. Deposit of Stock by the Company.
The Company agrees with the Depositary that neither the
Company nor any company controlled by the Company will at
any time deposit any Stock if such Stock is required to be
registered under the provisions of the Securities Act and no
registration statement is at such time in effect as to such
Stock.
SECTION 5.07. Indemnification by the Company.
The Company agrees to indemnify the Depositary, any
Depositary's Agent and any Registrar against, and hold each
of them harmless from, any liability, costs and expenses
(including reasonable fees and expenses of counsel) that may
arise out of or in connection with its acting as Depositary,
Depositary's Agent or Registrar, respectively, under this
Deposit Agreement and the Receipts, except for any liability
arising out of negligence, bad faith or willful misconduct
on the part of any such person or persons.
SECTION 5.08. Fees, Charges and Expenses. No
fees, charges and expenses of the Depositary or any
Depositary's Agent hereunder or of any Registrar shall be
payable by any person other than the Company, except for any
taxes and other governmental charges and except as provided
in this Deposit Agreement. If, at the request of a holder
of a Receipt, the Depositary incurs fees, charges or
expenses for which it is not otherwise liable hereunder,
such holder or other person will be liable for such fees,
charges and expenses. All other fees, charges and expenses
of the Depositary and any Depositary's Agent hereunder and
of any Registrar (including, in each case, reasonable fees
and expenses of counsel) incident to the performance of
their respective obligations hereunder will be paid from
time to time upon consultation and agreement between the
Depositary and the Company as to the amount and nature of
such fees, charges and expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the
Receipts and any provision of this Deposit Agreement may at
any time and from time to time be amended by agreement
between the Company and the Depositary in any respect that
they may deem necessary or desirable; provided, however,
that no such amendment that shall materially and adversely
alter the rights of the holders of Receipts shall be
effective as to outstanding Receipts until the expiration of
90 days after notice of such amendment shall have been given
to the record holders of outstanding Receipts and unless
such amendment shall have been approved by the holders of at
least a majority of the Depositary Shares outstanding. In
no event shall any amendment impair the right, subject to
the provisions of Sections 2.03, 2.06 and 2.07 and Article
III, of any owner of any Depositary Shares to surrender the
Receipt evidencing such Depositary Shares with instructions
to the Depositary to deliver to the holder the Stock and all
money and other property, if any, represented thereby,
except in order to comply with mandatory provisions of
applicable law.
SECTION 6.02. Termination. Whenever so directed
by the Company, the Depositary will terminate this Deposit
Agreement by mailing notice of such termination to the
record holders of all Receipts then outstanding at least 30
days prior to the date fixed in such notice for such
termination. The Depositary may likewise terminate this
Deposit Agreement if at any time 45 days shall have expired
after the Depositary shall have delivered to the Company a
written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its
appointment as provided in Section 5.04.
If any Receipts shall remain outstanding after the
date of termination of this Deposit Agreement, the
Depositary thereafter shall discontinue the transfer of
Receipts, shall suspend the distribution of dividends to the
holders thereof and shall not give any further notices
(other than notice of such termination) or perform any
further acts under this Deposit Agreement, except as
provided below and that the Depositary shall continue to
collect dividends and other distributions pertaining to
Stock, shall sell rights, preferences or privileges as
provided in this Deposit Agreement and shall continue to
deliver the Stock and any money and other property
represented by Receipts, without liability for interest
thereon, upon surrender thereof by the holders thereof. At
any time after the expiration of two years from the date of
termination, the Depositary may sell Stock then held
hereunder at public or private sale, at such places and upon
such terms as it deems proper and may thereafter hold in a
segregated account the net proceeds of any such sale,
together with any money and other property held by it
hereunder, without liability for interest, for the benefit,
pro rata in accordance with their holdings, of the holders
of Receipts that have not heretofore been surrendered.
After making such sale, the Depositary shall be discharged
from all obligations under this Deposit Agreement except to
account for such net proceeds and money and other property.
Upon the termination of this Deposit Agreement, the Company
shall be discharged from all obligations under this Deposit
Agreement except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.07 and
5.08. In the event this Deposit Agreement is terminated,
the Company hereby agrees to use its best efforts to list
the underlying Stock on the New York Stock Exchange, Inc.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit
Agreement may be executed by the Company and the Depositary
in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed an original, but
all such counterparts taken together shall constitute one
and the same instrument. Delivery of an executed
counterpart of a signature page to this Deposit Agreement by
telecopier shall be effective as delivery of a manually
executed counterpart of this Deposit Agreement. Copies of
this Deposit Agreement shall be filed with the Depositary
and the Depositary's Agents and shall be open to inspection
during business hours at the Corporate Office and the New
York Office and the respective offices of the Depositary's
Agents, if any, by any holder of a Receipt.
SECTION 7.02. Exclusive Benefits of Parties.
This Deposit Agreement is for the exclusive benefit of the
parties hereto, and their respective successors hereunder,
and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case
any one or more of the provisions contained in this Deposit
Agreement or in the Receipts should be or become invalid,
illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions
contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any notices to be given
to the Company hereunder or under the Receipts shall be in
writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or
telex or telecopier confirmed by letter, addressed to the
Company at 1615 Poydras St., New Orleans, Louisiana 70112,
Attention: Secretary, or at any other place to which the
Company may have transferred its principal executive office.
Any notices to be given to the Depositary
hereunder or under the Receipts shall be in writing and
shall be deemed to have been duly given if personally
delivered or sent by mail, or by telegram or telex or
telecopier confirmed by letter, addressed to the Depositary
at the Corporate Office.
Except as provided in the next paragraph, any
notices given to any record holder of a Receipt hereunder or
under the Receipts shall be in writing and shall be deemed
to have been duly given if personally delivered or sent by
mail, or by telegram or telex or telecopier confirmed by
letter, addressed to such record holder at the address of
such record holder as it appears on the books of the
Depositary or, if such holder shall have filed with the
Depositary a written request that notices intended for such
holder be mailed to some other address, at the address
designated in such request.
In addition, whenever the Certificate of
Designations requires any notice to be published, the
Depositary will, if requested by the Company, cause such
notice to be published in the manner directed by the
Company.
Delivery of a notice sent by mail, or by telegram
or telex or telecopier shall be deemed to be effected at the
time when a duly addressed letter containing the same (or a
duly addressed letter confirming an earlier notice in the
case of a telegram or telex or telecopier message) is
deposited, postage prepaid, in a post office letter box.
The Depositary or the Company may, however, act upon any
telegram or telex or telecopier message received by it from
the other or from any holder of a Receipt, notwithstanding
that such telegram or telex or telecopier message shall not
subsequently be confirmed by letter as aforesaid.
SECTION 7.05. Depositary's Agents. The
Depositary may, with the approval of the Company which
approval shall not be unreasonably withheld, from time to
time appoint one or more Depositary's Agents to act in any
respect for the Depositary for the purposes of this Deposit
Agreement and may vary or terminate the appointment of such
Depositary's Agents.
SECTION 7.06. Holders of Receipts Are Parties.
Notwithstanding that holders of Receipts have not executed
and delivered this Deposit Agreement or any counterpart
thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be
bound by all of the terms and conditions, and be entitled to
all of the benefits, hereof and of the Receipts by
acceptance of delivery of Receipts.
SECTION 7.07. Governing Law. This Deposit
Agreement and the Receipts and all rights hereunder and
thereunder and provisions hereof and thereof shall be
governed by, and construed in accordance with, the law of
the State of New York without giving effect to principles of
conflict of laws.
SECTION 7.08. Headings. The headings of articles
and sections in this Deposit Agreement and in the form of
the Receipt set forth in Exhibit A hereto have been inserted
for convenience only and are not to be regarded as a part of
this Deposit Agreement or to have any bearing upon the
meaning or interpretation of any provision contained herein
or in the Receipts.
IN WITNESS WHEREOF, Freeport-McMoRan Copper & Gold
Inc. and Mellon Securities Trust Company have duly executed
this Deposit Agreement as of the day and year first above
set forth and all holders of Receipts shall become parties
hereto by and upon acceptance by them of delivery of
Receipts issued in accordance with the terms hereof.
FREEPORT-McMoRan
COPPER & GOLD INC.
Attest:
By:_______________________ By:_______________________
Authorized Officer
MELLON SECURITIES TRUST
COMPANY
Attest:
By:_______________________ By:_______________________
Authorized Officer
Exhibit 4.4
[EXECUTION COPY]
3,000,000
SHARES
FREEPORT-MCMORAN COPPER & GOLD INC.
DEPOSITARY SHARES, SERIES II
EACH REPRESENTING 0.05 SHARES OF
GOLD-DENOMINATED PREFERRED STOCK, SERIES II
(PAR VALUE $0.10 PER SHARE)
U.S. UNDERWRITING AGREEMENT
January 13, 1994
LEHMAN BROTHERS INC.
KIDDER, PEABODY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
S.G.WARBURG & CO. INC.
As Representatives (the "Representatives") for each of
the several U.S. Underwriters named in Schedule 1,
c/o LEHMAN BROTHERS INC.
American Express Tower
World Financial Center
200 Vesey Street
New York, New York 10285
Dear Sirs:
Subject to all of the terms and conditions herein set forth,
Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"),
proposes to sell to the U.S. Underwriters named in Schedule 1 hereto (the
"U.S. Underwriters") 3,000,000 shares (the "Firm Stock") of the Company's
Depositary Shares, Series II (the "Depositary Shares"), each representing
0.05 Shares of Gold-Denominated Preferred Stock, Series II, par value $0.10
per share (the "Securities"), and to grant to the U.S. Underwriters an option
to purchase up to an additional 450,000 Depositary Shares (the "Option
Stock"). The Securities are to be deposited by the Company against delivery
of Depositary Receipts ("Depositary Receipts") evidencing the Depositary
Shares, which are to be issued by Mellon Securities Trust Company, as
depositary (the "Depositary"), under a Deposit Agreement, to be dated as of
January , 1994 (the "Deposit Agreement"), among the Company, the Depositary
and the holders from time to time of the Depositary Receipts issued
thereunder. The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "Stock." This is to con rm the agreement
concerning the purchase of the Stock from the Company by the U.S.
Underwriters.
It is understood by all parties that the Company is concurrently
entering into an agreement dated the date hereof (the "International
Underwriting Agreement") providing for the sale by the Company of up to
855,594 Depositary Shares (consisting of 750,000 shares of International Firm
Stock and up to 105,594 shares of International Option Stock (each as
de ned therein)) (the "International Stock") through arrangements with
certain underwriters outside the United States (collectively, the
"International Managers"), for whom Lehman Brothers International (Europe),
Kidder, Peabody International Limited, Merrill Lynch International Limited
and S.G. Warburg Securities Ltd. are acting as lead managers. The U.S.
Underwriters and the International Managers are simultaneously entering into
an agreement between the U.S. and international underwriting syndicates (the
"Agreement Between U.S. Underwriters and International Managers") which
provides for, among other things, the transfer of Depositary Shares between
the two syndicates. Two forms of prospectus are to be used in connection
with the offering and sale of Depositary Shares contemplated by the
foregoing, one relating to the Stock and the other relating to the
International Stock. The latter form of prospectus will be identical to the
former except for certain substitute pages. Except as used in Sections 2, 3,
4, 9 and 10 herein, and except as the context may otherwise require,
references herein to the Stock shall include all the Depositary Shares which
may be sold pursuant to either this agreement or the International
Underwriting Agreement, and reference herein to any prospectus whether in
preliminary or nal form, and whether as amended or supplemented, shall
include both the U.S. and international versions thereof.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No. 33-66098)
with respect to, among other things, the Securities and the Depositary
Shares representing the Securities, including a prospectus, has been
carefully prepared by the Company in conformity with the requirements
of the Securities Act of 1933 ("Act") and the rules and regulations
("Rules and Regulations") of the Securities and Exchange Commission
("Commission") thereunder and led with the Commission and has become
effective. Such registration statement and prospectus may have been
amended or supplemented prior to the date of this Agreement; any such
amendment or supplement was so prepared and led and any such
amendment led after the effective date of such registration statement
has become effective. No stop order suspending the effectiveness of
the registration statement or preventing or suspending the use of any
Preliminary Prospectus (as hereinafter de ned) has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission. A prospectus supplement ("Prospectus Supplement") setting
forth the terms of the Securities and the Depositary Shares and of
their sale and distribution has been or will be so prepared and will
be led pursuant to Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations); and the Rules
and Regulations do not require the Company to, and, without the
consent of the Representatives, the Company will not, le a post-
effective amendment after the time of execution of this Agreement and
prior to the ling of such Prospectus Supplement (other than any
document led under the Securities Exchange Act of 1934 (the
"Exchange Act") that upon ling is deemed to be incorporated by
reference therein). Copies of such registration statement and
prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were led with the Commission
on or prior to the date of this Agreement (including one fully
executed copy of the registration statement and of each amendment
thereto for each of the Representatives and for counsel for the
Underwriters) have been delivered to the Representatives. Such
registration statement, as it may have heretofore been amended, is
referred to herein as the "Registration Statement", and the nal form
of prospectus included in the Registration Statement, as supplemented
by the Prospectus Supplement, is referred to herein as the
"Prospectus". Each form of Prospectus, Prospectus Supplement, or
Prospectus and Prospectus Supplement, if any, heretofore made
available for use in offering the Securities is referred to herein as
a "Preliminary Prospectus". Any reference herein to the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or Prospectus shall be deemed to refer to the
ling of any document with the Commission deemed to be incorporated by
reference therein that has not heretofore been delivered to the
Representatives.
(b) Each part of the Registration Statement, when such part
became or becomes effective, each Preliminary Prospectus, on the date
of ling thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of ling thereof with the
Commission and on each Delivery Date (as hereinafter de ned),
conformed or will conform in all material respects with the
requirements of the Act and the Rules and Regulations; each part of
the Registration Statement, when such part became or becomes
effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
each Preliminary Prospectus, on the date of ling thereof with the
Commission, and the Prospectus and any amendment or supplement
thereto, on the date of ling thereof with the Commission and on each
Delivery Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Representative, through the Representatives by or on behalf of any
U.S. Underwriter or by any International Manager speci cally for
inclusion therein.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any Preliminary Prospectus, when they became or become
effective under the Act or were or are led with the Commission under
the Exchange Act, as the case may be, conformed or will conform in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the Rules and Regulations of the Commission
thereunder.
(d) The consolidated nancial statements of the Company, P.T.
Freeport Indonesia Company, a limited liability company organized
under the laws of Indonesia and domesticated in Delaware ("PT-FI"),
Eastern Mining Company, Inc., a Delaware corporation ("EMC"), and
(where applicable) Rio Tinto Minera, S.A., a limited liability company
organized under the laws of Spain ("RTM"), and the consolidated
financial statements of RTM, included or incorporated by reference in
the Registration Statement and Prospectus present fairly the
consolidated nancial position of the Company, PT-FI, EMC and (where
applicable) RTM, and of RTM, respectively, as at the dates indicated
and the consolidated results of operations and cash flows of such
entities for the periods speci ed and have been prepared in conformity
with generally accepted accounting principles (in the case of RTM,
generally accepted accounting principles in Spain) applied on a
consistent basis during the periods involved, except as indicated
therein; and the unaudited pro forma nancial information included in
the Company's current report on Form 8-K dated April 13, 1993 (as
amended May 21, 1993 and August 5, 1993) complies as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of such
statements.
(e) The Company does not have any subsidiaries that would
constitute signi cant subsidiaries within the meaning of Rule 405
under the Act other than PT-FI and RTM.
(f) Each of the Company, EMC and RTM has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; PT-FI has been
domesticated in the State of Delaware and is in good standing under
the laws of its jurisdiction of domestication and is a limited
liability company duly organized under the laws of the Republic of
Indonesia; each of the Company, PT-FI, EMC and RTM has full power and
authority (corporate and other) to own its properties and conduct its
business as described in the Registration Statement and Prospectus;
and each of the Company, PT-FI and EMC has been duly quali ed as a
foreign corporation for the transaction of business and is in good
standing to the extent applicable under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such quali cation, except where the failure
to be so quali ed or in good standing, considering all such cases in
the aggregate, does not involve a material risk to the business,
properties, nancial position or results of operations of the Company
and its subsidiaries.
(g) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Company, PT-FI,
EMC or RTM has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its
subsidiaries, and there has not been any material change, on a
consolidated basis, in the capital stock, short-term debt or long-term
debt of the Company and its subsidiaries (other than changes resulting
from exchanges of the Company's Zero Coupon Exchangeable Notes due
2011), or any material adverse change in the prospects, or any
material adverse change, or any development involving a prospective
material adverse change, in the condition ( nancial or other),
business, net worth or results of operations of the Company and its
subsidiaries.
(h) The Company has an authorized capitalization as set forth
in the Prospectus, and all the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; all the issued shares of capital stock of PT-
FI and EMC have been duly and validly authorized and issued, are fully
paid and non-assessable and the portion of such shares shown by the
Prospectus as bene cially owned by the Company are so owned subject to
no security interest, other encumbrance or adverse claim; and the
shares of RTM subscribed for by the Company constitute all the issued
and outstanding shares of RTM and the Company has good and marketable
title to such shares, free and clear of any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any
kind and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such
shares).
(i) The Securities and the Depositary Shares have been duly
authorized by the Company and the Securities, when issued and
delivered against payment therefor as contemplated hereby, will be
validly issued, fully paid and non-assessable; when the Depositary
Receipts are issued in accordance with the provisions of the Deposit
Agreement, such Depositary Receipts will entitle the holders thereof
to the rights speci ed in such Depositary Receipts and in the Deposit
Agreement; and the issuance of the Securities and the Depositary
Shares are not subject to the preemptive rights of any stockholder of
the Company.
(j) Neither the Company nor any of its agents or other persons
acting on its behalf (other than the U.S. Underwriters or the
International Managers, as to which no representation is made), has
marketed the Securities or the Depositary Shares as futures contracts
or commodity options or, except to the extent necessary to describe
the functioning of the Securities and Depositary Shares or to comply
with applicable disclosure requirements, as having the characteristics
of futures contracts or commodity options.
(k) The Deposit Agreement has been duly authorized, and when
duly executed and delivered by the Company, the Deposit Agreement will
constitute a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
persons in whose names such Depositary Receipts are registered will be
entitled to the rights speci ed in such Depositary Receipts and in the
Deposit Agreement.
(l) Pursuant to the terms of the Certi cate of Designations,
the Securities are subject to mandatory redemption, out of funds
legally available therefor, in whole by the Company on February 1,
2006.
(m) The Depositary Shares, the Deposit Agreement and the
Securities conform, or when so issued will conform, in all material
respects to the descriptions thereof contained in the Prospectus.
(n) The statements in the Prospectus under the captions
"Relationship of the Company Group with the FTX Group", "Description
of Preferred Stock" and "Description of Depositary Shares" and in the
Prospectus Supplement under the captions "Description of Gold-
Denominated Preferred Stock" and "Description of Depositary Shares",
insofar as such statements constitute summaries of the documents and
matters referred to therein, fairly and accurately present the
information called for with respect to such documents and matters.
(o) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened, any action,
suit or proceeding to which the Company, PT-FI, EMC or RTM is a party
before or by any court or governmental agency or body, which could
reasonably be expected to result in any material adverse change in the
condition ( nancial or other), business, prospects, net worth or
results of operations of the Company and its subsidiaries, or would
reasonably be expected to materially and adversely affect the
properties or assets thereof.
(p) The issuance and delivery of the Depositary Shares and the
Securities, the execution and delivery of this Agreement and the
Deposit Agreement by the Company, the consummation by the Company of
the transactions herein and therein contemplated, and the compliance
by the Company with the terms hereof and thereof do not and will not
conflict with, or result in a breach or violation of, any of the terms
or provisions of, or constitute a default under, the Certi cate of
Incorporation or By-laws, as amended, of the Company, PT-FI or EMC or
the Certi cate of Domestication of PT-FI or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which the Company, PT-FI or EMC is a party or by which any of their
respective properties or assets are bound, or any applicable law,
rule, regulation, judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having
jurisdiction over the Company, PT-FI or EMC or any of their respective
properties or assets (other than any such conflict, breach, violation
or default which, individually or in the aggregate, would not have a
material adverse effect on the condition ( nancial or other),
business, prospects, net worth or results of operations of the Company
and its subsidiaries taken as a whole); and no consent, approval,
authorization, order, registration or quali cation of or with any
government, governmental instrumentality or court, domestic or
foreign, including, without limitation, the U.S. Commodity Futures
Trading Commission (the "CFTC"), is required for the valid
authorization by the Company of the Securities or the Depositary
Shares, the issuance and delivery of the Depositary Shares, the valid
authorization, execution, delivery and performance by the Company of
this Agreement and the Deposit Agreement or the consummation by the
Company of the transactions contemplated by this Agreement and the
Deposit Agreement, except the ling with the Secretary of State of the
State of Delaware of a certi cate of designations with respect to the
Securities and except such consents, approvals, authorizations,
orders, registrations or quali cations as are required under the Act
and the securities or Blue Sky laws of the various states in
connection with the purchase by the U.S. Underwriters and distribution
of the Securities and the Depositary Shares.
(q) This Agreement has been duly authorized, executed and
delivered by the Company.
(r) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Prospectus.
(s) There are no contracts or documents of the Company, PT-FI,
EMC or RTM that are required to be led as exhibits to the
Registration Statement or to any of the documents incorporated by
reference therein by the Act, the Exchange Act or the Rules and
Regulations of the Commission thereunder that have not been so led.
2. Purchase of Stock by the U.S. Underwriters. On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 3,000,000 shares of
the Firm Stock to the several U.S. Underwriters and each of the U.S.
Underwriters, severally and not jointly, agrees to purchase the number of
shares of the Firm Stock set opposite that U.S. Underwriter's name in
Schedule 1 hereto, as such number may be increased in accordance with Section
9.
In addition, the Company hereby grants to the U.S. Underwriters
an option to purchase up to 450,000 shares of Option Stock. Such option is
granted solely for the purpose of covering over-allotments in the sale of
Firm Stock and is exercisable as provided in Section 4 hereof. Shares of
Option Stock shall be purchased severally for the account of the U.S.
Underwriters in proportion to the number of shares of Firm Stock set opposite
the name of such U.S. Underwriters in Schedule 1 hereto. The respective
purchase obligations of each U.S. Underwriter with respect to the Option
Stock shall be adjusted by the Representatives so that no U.S. Underwriter
shall be obligated to purchase Option Stock other than in 100 share amounts.
The purchase price of both the Firm Stock and any Option Stock
shall be $ per share.
The Company shall not be obligated to deliver any of the Stock
to be delivered on the First Delivery Date or the Second Delivery Date (each,
as hereinafter de ned), as the case may be, except upon payment for all the
Stock (including the International Stock) to be purchased on such Delivery
Date as provided herein and in the International Underwriting Agreement.
3. Offering of Stock by the U.S. Underwriters. Upon
authorization by the Representatives of the release of the Firm Stock, the
several U.S. Underwriters propose to offer the Firm Stock for sale upon the
terms and conditions set forth in the Prospectus.
Each U.S. Underwriter agrees that, except to the extent
permitted by the Agreement Between U.S. Underwriters and International
Managers, (A) it is not purchasing any Stock for the account of anyone other
than a U.S. Person (as de ned below) and (B) it has not offered or sold, and
will not offer, sell, resell or deliver, directly or indirectly, any of the
Stock or distribute any Preliminary Prospectus or Prospectus to anyone other
than a U.S. Person. As used herein, the terms "United States" and "U.S."
shall mean the United States of America (including the states thereof and the
District of Columbia) and its territories, its possessions and other areas
subject to its jurisdiction, and the term "U.S. Person" shall mean any
resident or national of the United States, any corporation, partnership or
other entity created or organized in or under the laws of the United States
or any estate or trust the income of which is subject to United States
federal income taxation regardless of its source (other than a foreign branch
of any U.S. Person), and includes a United States branch of a person other
than a U.S. Person.
Each U.S. Underwriter represents, warrants and agrees that
neither it nor any of its agents or other persons acting on its behalf has
marketed or will market the Securities or the Depositary Shares as futures
contracts or commodity options or, except to the extent necessary to describe
the functioning of the Securities and Depositary Shares or to comply with
applicable disclosure requirements, as having the characteristics of futures
contracts or commodity options; and the Representatives confirm to the
Company that each dealer who has marketed or will market the Securities or
Depositary Shares as a "Selected Dealer" at the written request of the
Representatives has agreed to comply with such limitations.
4. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the o ce of Lehman Brothers Inc.,
388 Greenwich Street (Cashier's Window, Main Level), New York, New York
10013, at approximately 9:30 a.m., New York City time, on the fth full
business day following the date of this Agreement or at such other date or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as the "First Delivery
Date." On the First Delivery Date, the Company shall deliver or cause to be
delivered certi cates representing the Firm Stock to the Representatives for
the account of each U.S. Underwriter against payment to or upon the order of
the Company of the purchase price by certi ed or o cial bank check or checks
payable in New York Clearing House (next-day) funds. Time shall be of the
essence, and delivery of, and payment for, the Firm Stock at the time and
place speci ed pursuant to this Agreement is a further condition of the
obligation of each U.S. Underwriter and the Company hereunder. Upon
delivery, the Firm Stock shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than
two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certi cates for the Firm Stock,
the Company shall make the certi cates representing the Firm Stock available
for inspection by the Representatives in New York, New York, not later than
2:00 p.m., New York City time, on the business day prior to the First
Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement, the option granted in Section 2 may be exercised by written
notice being given to the Company by the Representatives. Such notice shall
set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are
to be registered, the denominations in which the shares of Option Stock are
to be issued and the date and time, as determined by the Representatives,
when the shares of Option Stock are to be delivered; provided, however, that
this date and time shall not be earlier than the First Delivery Date nor
earlier than the third business day after the date on which the option shall
have been exercised nor later than the fth business day after the date on
which the option shall have been exercised. The date and time the shares of
Option Stock are delivered are sometimes referred to as the "Second Delivery
Date" and the First Delivery Date and the Second Delivery Date are each
sometimes referred to as a "Delivery Date."
Delivery of and payment for the Option Stock shall be made at
the o ce of Lehman Brothers Inc., 388 Greenwich Street (Cashier's Window,
Main Level), New York, New York 10013 (or at such other place as shall be
determined by agreement between the Representatives and the Company) at
approximately 9:30 a.m., New York City time, on the Second Delivery Date. On
the Second Delivery Date, the Company shall deliver or cause to be delivered
the certi cates representing the Option Stock to the Representatives for the
account of each U.S. Underwriter against payment to or upon the order of the
Company of the purchase price by certi ed or o cial bank check or checks
payable in New York Clearing House (next-day) funds. Time shall be of the
essence, and delivery of, and payment for, the Option Stock at the time and
place speci ed pursuant to this Agreement is a further condition of the
obligation of each U.S. Underwriter and the Company hereunder. Upon
delivery, the Option Stock shall be registered in such names and in such
denominations as the Representatives shall request in the aforesaid written
notice. For the purpose of expediting the checking and packaging of the
certi cates for the Option Stock, the Company shall make the certi cates
representing the Option Stock available for inspection by the Representatives
in New York, New York, not later than 2:00 p.m., New York City time, on the
business day prior to the Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) The Company will cause the Prospectus Supplement to be
led as required by Section 1(a) hereof (but only if the
Representatives have not reasonably objected thereto by notice to the
Company after having been furnished a copy a reasonable time prior to
ling) and will notify the Representatives promptly of such ling; as
long as a prospectus is required to be delivered under the Act in
connection with the sale of the Depositary Shares, the Company will
notify the Representatives promptly of the time when any subsequent
amendment to the Registration Statement has become effective or any
subsequent supplement to the Prospectus has been led (and furnish the
Representatives with copies thereof) and of any request by the
Commission for any amendment or supplement to the Registration
Statement or the Prospectus or for additional information; it will
prepare and le with the Commission, promptly upon request of the
Representatives, any amendments or supplements to the Registration
Statement or the Prospectus that, in the opinion of the
Representatives, may be necessary or advisable in connection with the
distribution of the Securities and the Depositary Shares by the U.S.
Underwriters; it will le no amendment or supplement to the
Registration Statement or Prospectus (other than any document led
under the Exchange Act that upon ling is deemed to be incorporated by
reference therein) to which the Representatives shall reasonably
object by notice to the Company after having been furnished a copy a
reasonable time prior to the ling; and it will furnish to the
Representatives at or prior to the ling thereof a copy of any
document that upon ling is deemed to be incorporated by reference in
the Registration Statement or the Prospectus.
(b) The Company will advise the Representatives, promptly
after it shall receive notice or obtain knowledge thereof, of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, of any order preventing
or suspending the use of any prospectus relating to the Securities or
the Depositary Shares, of the suspension of the quali cation of the
Securities or the Depositary Shares for offering or sale in any
jurisdiction or of the initiation or threatening of any proceeding for
any such purpose; and it will promptly use its best efforts to prevent
the issuance of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities or the
Depositary Shares or suspending any such quali cation or to obtain its
withdrawal if such a stop order or order should be issued.
(c) Within the time during which a prospectus relating to the
Securities or the Depositary Shares is required to be delivered under
the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Securities or
the Depositary Shares as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period
it is necessary to amend or supplement the Registration Statement or
the Prospectus or to le under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, the Company will promptly notify the
Representatives and will amend or supplement the Registration
Statement or the Prospectus or le such document (at the expense of
the Company) so as to correct such statement or omission or effect
such compliance.
(d) The Company will arrange to qualify the Securities and the
Depositary Shares for sale under the securities laws of such
jurisdictions as the Representatives designate and will maintain such
quali cations in effect so long as required for the distribution of
such Securities and Depositary Shares, except that the Company shall
not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in
any such jurisdiction.
(e) Neither the Company nor any of its agents or other persons
acting on its behalf (other than the U.S. Underwriters and the
International Managers, as to which the Company makes no covenant)
will market the Securities or the Depositary Shares as futures
contracts or commodity options or, except to the extent necessary to
describe the functioning of the Securities and Depositary Shares or to
comply with applicable disclosure requirements, as having the
characteristics of futures contracts or commodity options.
(f) The Company will furnish to the Representatives and their
counsel without charge, conformed copies of the Registration Statement
as originally led and all amendments thereto, whether led before or
after such Registration Statement originally became effective
(including all exhibits thereto), and each Preliminary Prospectus, the
Prospectus (including all documents incorporated by reference therein)
and any amendments thereof and supplements thereto, in each case as
soon as available and in such quantities as the Representatives may
from time to time reasonably request.
(g) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 45
days after the end of the 12-month period beginning at the end of the
scal quarter of the Company during which the effective date of the
Registration Statement occurs, an earning statement of the Company (in
form complying with the provisions of Rule 158 under the Rules and
Regulations), covering such 12-month period that shall satisfy the
provisions of Section 11(a) of the Act, it being understood that the
Company intends to satisfy this requirement by ling of its annual
report on Form 10-K and its quarterly reports on Form 10-Q.
(h) The Company shall not, directly or indirectly, except with
the prior written consent of the Representatives, during the period
beginning from the date hereof and continuing to and including the day
90 days after the date hereof, offer, sell, contract to sell to any
person other than the U.S. Underwriters or otherwise dispose of any
securities of the Company which are, or which are convertible or
exchangeable or exercisable for securities which are, substantially
similar to the Depositary Shares or the Securities (the "Restricted
Securities"), except for the Stock.
(i) The Company will promptly after the date hereof, in the
event it has not already done so, le an application for the listing
of the Depositary Shares on the New York Stock Exchange and will
arrange to cause such Depositary Shares to be duly authorized for
listing thereon, subject to o cial notice of issuance. The Company
will use its best efforts to cause the Depositary Shares to be
registered under the Exchange Act.
(j) During the period of ve years hereafter, the Company will
furnish to the Representatives, as soon as practicable after the end
of each scal year, a copy of its annual report to stockholders for
such year; and the Company will furnish to the Representatives (i) as
soon as available, a copy of each report or de nitive proxy statement
of the Company led with the Commission under the Exchange Act or
mailed to shareholders and (ii) from time to time, such other
information concerning the Company as the Representatives may
reasonably request.
6. Expenses. The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, will
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing,
ling and distribution of any Preliminary Prospectuses, the Prospectus, the
Registration Statement and any amendments thereof or supplements thereto,
(ii) the preparation, printing and distribution of this Agreement, the
International Managers' Questionnaire, the Agreement Among International
Managers, the Supplemental Agreement Among U.S. Underwriters, the
International Underwriting Agreement, the Agreement Between U.S. Underwriters
and International Managers, any Selling Agreement, the Securities, the
Depositary Receipts, the Deposit Agreement, the Certi cate of Designations,
the shares of Common Stock and any Blue Sky memoranda, (iii) the distribution
of the terms of agreement relating to the organization of the underwriting
syndicate and the selling group to the members thereof by mail, telex or
other means of communication, (iv) the issuance and delivery of the
Depositary Receipts to you, (v) the fees and disbursements of the Company's
counsel and accountants and other experts, (vi) the expenses of qualifying
the Securities and the Depositary Shares under state securities laws in
accordance with the provisions of Section 5(d), including ling fees and
reasonable fees and disbursements of your counsel in connection therewith and
in connection with any Blue Sky memoranda, (vii) the fees and expenses of the
Depositary and any agent of the Depositary, including the fees and
disbursements of counsel for the Depositary in connection with the Deposit
Agreement and the Depositary Shares, (viii) the fees and expenses, if any,
incurred in connection with the listing of the Depositary Shares on the New
York Stock Exchange and (ix) any ling fee of the National Association of
Securities Dealers, Inc. relating to the Securities. If the sale of the
Securities and the Depositary Shares provided for herein is not consummated
by reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of your obligations hereunder required to be ful lled by the
Company is not ful lled, the Company will reimburse you for all reasonable
out-of-pocket disbursements (including reasonable fees and disbursements of
counsel) incurred by you in connection with your investigation, preparing to
market and marketing the Securities and the Depositary Shares or in
contemplation of performing your obligations hereunder. The Company shall
not in any event be liable to you for loss of anticipated pro ts from the
transactions covered by this Agreement.
7. Conditions of U.S. Underwriters' Obligations. The
respective obligations of the U.S. Underwriters hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company
of its obligations hereunder and to each of the following additional terms
and conditions:
(a) The Prospectus Supplement shall have been led as required
by Section 1(a) hereof; and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding
for that purpose shall have been instituted or threatened by the
Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.
(b) No U.S. Underwriter or International Manager shall have
advised the Company that the Registration Statement or Prospectus, or
any amendment or supplement thereto, contains an untrue statement of
fact that in the opinion of the Representatives is material, or omits
to state a fact that in the opinion of the Representatives or counsel
for the U.S. Underwriters is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been
any change, on a consolidated basis, in the capital stock (other than
changes resulting from issuances of shares of the Company's Class A
Common Stock, par value $0.10 per share (the "Common Stock"), in
connection with the conversion or exchange of any security of the
Company outstanding on the date as of which such information is
given), short-term debt or long-term debt of the Company and its
subsidiaries, or any adverse change in the prospects, or any adverse
change, or any development involving a prospective adverse change, in
the condition ( nancial or other), business, net worth or results of
operations of the Company and its subsidiaries or any change in the
rating assigned to any securities of the Company that, in the judgment
of the Representatives, makes it impractical or inadvisable to offer
or deliver the Depositary Shares on the terms and in the manner
contemplated in the Prospectus.
(d) The Representatives shall have received the opinion of
Davis Polk & Wardwell, special counsel for the Company, dated such
Delivery Date, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of its
jurisdiction of incorporation and PT-FI has been domesticated
and is in good standing under the laws of its jurisdiction of
domestication;
(ii) The Securities being delivered on such Delivery Date
have been duly authorized and validly issued and are fully paid
and non-assessable; and the issuance of such Securities is not
subject to the preemptive rights of any stockholder of the
Company;
(iii) The Depositary Shares being delivered on such Delivery
Date have been duly issued in accordance with the provisions of
the Deposit Agreement and the persons in whose names the
Depositary Receipts being delivered on such Delivery Date are
registered are entitled to the rights speci ed in such
Depositary Receipts and in the Deposit Agreement;
(iv) The Deposit Agreement has been duly authorized,
executed and delivered by the Company, and the Deposit Agreement
constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(v) Pursuant to the terms of the Certi cate of
Designations, the Securities are subject to mandatory
redemption, out of funds legally available therefor, in whole by
the Company on February 1, 2006.
(vi) The statements in the Prospectus under the captions
"Relationship of the Company Group with the FTX Group",
"Description of Preferred Stock" and "Description of Depositary
Shares", and in the Prospectus Supplement under the captions
"Description of Gold-Denominated Preferred Stock" and
"Description of Depositary Shares", insofar as such statements
constitute summaries of the documents and matters referred to
therein, fairly and accurately present the information called
for with respect to such documents and matters;
(vii) The Registration Statement has become effective under
the Act; the Prospectus Supplement has been led as required by
Section 1(a) hereof; and to the best knowledge of such counsel
no stop order suspending the effectiveness of the Registration
Statement or order preventing or suspending the use of any
prospectus relating to the Securities or the Depositary Shares
has been issued under the Act and no proceedings for that
purpose have been instituted or threatened;
(viii) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or
supplement thereto, on the date of ling thereof with the
Commission, complied as to form in all material respects with
the requirements of the Act and the Rules and Regulations; and
such counsel has no reason to believe that any such part of the
Registration Statement, when such part became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the
Prospectus, as of its date and on such Delivery Date, and any
amendment or supplement thereto, as of the date thereof and on
such Delivery Date, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that
such counsel need express no opinion as to the nancial
statements or other nancial data included or incorporated by
reference in any of the documents mentioned in this clause
(viii);
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The issuance and delivery by the Company of the
Depositary Shares, the execution and delivery of this Agreement
and the Deposit Agreement by the Company, the consummation by
the Company of the transactions herein and therein contemplated
and compliance by the Company with the terms of this Agreement
and the Deposit Agreement, will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under (a) the charter or by-laws of the Company or PT-
FI, or (b) to the best of such counsel's knowledge, but without
any independent investigation, any Federal securities law of the
United States, any law of the State of New York or the Delaware
General Corporation Law, or of any order, writ, judgment,
decree, determination or award binding on the Company; and no
consent, approval, authorization or order of, or ling with, any
court or governmental agency or body, including, without
limitation, the CFTC, is required for the consummation of the
transactions contemplated by this Agreement, except (i) the
ling of the Certi cate of Designations which has been made
prior to the First Delivery Date and (ii) such as have been
obtained under the Act and such as may be required under state
laws in connection with the purchase and distribution of the
Depositary Shares by the several U.S. Underwriters; and
(xi) The offer and sale of the Depositary Shares and the
Securities do not violate the United States Commodity Exchange
Act, as amended (the "CEA"), or the rules and regulations of the
CFTC thereunder.
(e) The Representatives shall have received the opinion of
John G. Amato, Esq., General Counsel of the Company, dated such
Delivery Date, to the effect that:
(i) Each of the Company and PT-FI has full power and
authority (corporate and other) to conduct its business as
described in the Prospectus and is duly quali ed to do business
in each jurisdiction in which it owns or leases real property or
in which the conduct of its business requires such quali cation
except where the failure to be so quali ed, considering all such
cases in the aggregate, does not involve a material risk to the
business, properties, nancial position or results of operations
of the Company and its subsidiaries;
(ii) The documents incorporated by reference in the
Prospectus, when they were led with the Commission, complied as
to form in all material respects with the requirements of the
Exchange Act and the Rules and Regulations thereunder; and such
counsel believes that none of such documents, when such
documents were so led, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents
were so led, not misleading, it being understood that such
counsel need express no opinion as to the nancial statements or
other nancial data included in any of the documents mentioned
in this clause (ii);
(iii) The descriptions in the Prospectus of statutes, legal
and governmental proceedings, contracts and other documents are
accurate and fairly present the information required to be
shown; and such counsel does not know of any statutes or legal
or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any
contracts or documents of a character required to be described
in the Prospectus (or required to be led under the Exchange Act
if upon such ling they would be incorporated by reference
therein) or to be led as exhibits to the Registration Statement
that are not described and led as required;
(iv) The performance of this Agreement and the Deposit
Agreement and the consummation of the transactions herein and
therein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any statute, any agreement or instrument known to such
counsel to which the Company or PT-FI is a party or by which any
of them is bound or to which any of the property of any of them
is subject, or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or PT-FI or any of their
properties; and
(v) The Company has an authorized capitalization as set
forth in the Prospectus (other than changes resulting from
issuances of shares of Common Stock in connection with the
conversion or exchange of any security of the Company
outstanding on the date as of which such information is given);
all the issued shares of capital stock of PT-FI shown in the
Prospectus as beneficially owned by the Company have been duly
and validly authorized and issued, are fully paid and non-
assessable and are so owned subject to no security interest,
other encumbrance or adverse claim.
(f) The Representatives shall have received the opinion of
Miller & Chevalier, special tax counsel for the Company, dated such
Delivery Date, to the effect that the description contained under
"Certain Federal Income Tax Consequences" in the Prospectus Supplement
is complete, fair and accurate in all material respects.
(g) The Representatives shall have received the opinion of Ali
Budiardjo, Nugroho, Reksodiputro, special Indonesian counsel for the
Company, dated such Delivery Date, to the effect that:
(i) PT-FI has been duly organized and is an existing
corporation in good standing under the laws of Indonesia;
(ii) the Contract of Work, dated December 30, 1991, between
the Ministry of Mines of the Government of The Republic of
Indonesia, acting for such Government, and PT-FI (the "Contract
of Work"), has been duly authorized, executed and delivered by
and constitutes the valid and binding obligation of the parties
thereto, is in full force and effect and is enforceable in
accordance with its terms;
(iii) other than those already granted in or pursuant to the
Contract of Work and routine authorizations, permissions,
consents or approvals (including approvals required under
certain routine administrative regulations), which are of a
minor nature and which are customarily granted in due course
after application, or the denial of which would not materially
adversely affect the business, present or proposed, of PT-FI, no
registration with, or authorization or order of, The Government
of Indonesia or any subdivision thereof is required to permit
PT-FI to carry out its operations, including those described in
the Prospectus; to procure and import equipment and other
materials therefor; to export its products, or to construct,
equip, own, operate or maintain its assets or business; and
(iv) to the best of such counsel's knowledge after due
inquiry, other than routine tax audits conducted in accordance
with the terms of the Contract of Work, there is no action,
suit, proceeding or investigation by or before any Indonesian
court or governmental authority pending or threatened against or
affecting PT-FI or any of its properties or rights which, if
determined adversely to PT-FI, would in the aggregate have a
material adverse effect on its present or future business or
condition.
(h) The Representatives shall have received the opinion of J.
& A. Garrigues, special Spanish counsel for the Company, dated such
Delivery Date, to the effect that
(i) RTM has been duly incorporated and is an existing
corporation in good standing under the laws of its jurisdiction
of incorporation;
(ii) all issued and outstanding shares of the capital stock
of RTM (the "RTM Shares") have been duly and validly authorized,
issued and subscribed for by the Company pursuant to the
Subscription Agreement, dated as of January 28, 1993, among
Freeport-McMoRan Inc., RTM and Ercros, S.A. (the "Subscription
Agreement");
(iii) when payment in full for the RTM Shares has been made
in accordance with the terms of the Subscription Agreement, the
RTM Shares will be fully paid and nonassessable;
(iv) until such time as the RTM Shares are fully paid, the
maximum amount that may be assessed in respect of any such RTM
Share is the difference between its par value of Ptas. 500 and
the amount paid in respect of such share as of the date of such
assessment; and
(v) all RTM Shares are bene cially owned by the Company and
are so owned subject to no security interest, other encumbrance
or adverse claim.
(i) The Representatives shall have received from Sullivan &
Cromwell, counsel to the U.S. Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the incorporation of the
Company, the validity of the Securities and the Depositary Shares
being delivered on such Delivery Date, the Deposit Agreement, the
Registration Statement, the Prospectus and other related matters as
the Representatives reasonably may request, and such counsel shall
have received such papers and information as they request to enable
them to pass upon such matters.
(j) The Representatives shall have received the opinion of
Cleary, Gottlieb, Steen & Hamilton, special commodities counsel to the
U.S. Underwriters, dated such Delivery Date, to the effect that the
offer, sale, issuance and delivery by the Company of the Securities
and the Depositary Shares being delivered on such Delivery Date in the
manner contemplated by this Agreement, the International Underwriting
Agreement and the Prospectus, the execution and delivery of this
Agreement, the International Underwriting Agreement and the Deposit
Agreement and the performance by the Company of its obligations under
the terms of the Securities and the Depositary Shares will not violate
the CEA or the rules and regulations of the CFTC thereunder.
(k) At the time of execution of this Agreement and on each
Delivery Date, the Representatives shall have received a letter from
Arthur Andersen & Co., dated the date of delivery thereof, to the
effect that (i) they are independent certi ed public accountants with
respect to the Company and PT-FI within the meaning of the Act and the
Rules and Regulations and that the answer to Item 10 of the
Registration Statement form is correct insofar as it relates to them;
(ii) in their opinion, the nancial statements and schedules examined
by them included or incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects
with the applicable requirements of the Act or the Exchange Act, as
applicable, and the published Rules and Regulations thereunder;
(iii) based upon a review made in accordance with standards
established by the American Institute of Certi ed Public Accountants
of the unaudited consolidated condensed pro forma nancial information
incorporated by reference in the Registration Statement and the
Prospectus, nothing came to their attention that caused them to
believe that such unaudited pro forma consolidated condensed nancial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published rules
and regulations thereunder or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
those statements; and (iv) as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives.
(l) At the time of execution of this Agreement and on each
Delivery Date, the Representatives shall have received a letter from
Coopers & Lybrand, S.A., dated the date of delivery thereof, to the
effect that they are independent certi ed public accountants with
respect to RTM within the meaning of the Act and the Rules and
Regulations.
(m) The Representatives shall have received from the Company a
certi cate, signed by the Chairman of the Board, the President or a
Vice President and by the principal nancial or accounting o cer,
dated such Delivery Date, to the effect that, to the best of their
knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of
such Delivery Date, and the Company has complied with all the
agreements and satis ed all the conditions on its part to be
performed or satis ed at or prior to such Delivery Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or is threatened by the
Commission; and
(iii) Since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no
document required to be led under the Exchange Act and the
Rules and Regulations thereunder that upon such ling would be
deemed to be incorporated by reference in the Prospectus that
has not been so led.
(n) The Depositary Shares shall have been duly approved for
listing by the New York Stock Exchange, subject only to o cial notice
of issuance.
(o) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or limitation in trading in
the Common Stock or in securities generally on the New York Stock
Exchange or the American Stock Exchange or any setting of minimum or
maximum prices or ranges of prices for trading on any such Exchange;
(ii) a moratorium on banking activities in New York declared by either
Federal or New York State authorities; or (iii) any material adverse
change in the nancial markets in the United States or any outbreak or
escalation of hostilities or other calamity or crisis involving the
United States, or the declaration by the United States of a national
emergency or war, if the effect of any such event speci ed in clause
(iii) above in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Depositary Shares to be purchased by the U.S.
Underwriters.
(p) The Company shall have furnished to the Representatives
such further certi cates and documents as the Representatives shall
have reasonably requested.
(q) The closing under the International Underwriting Agreement
shall have occurred concurrently with the closing hereunder on the
First Delivery Date.
All opinions, letters, evidence and certi cates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel for the U.S. Underwriters.
8. Indemni cation and Contribution.
(a) The Company will indemnify and hold harmless each U.S.
Underwriter and each person who controls each U.S. Underwriter within the
meaning of the Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, joint or several, to which such U.S.
Underwriter may become subject, under the Act or otherwise, arising
out of any untrue statement or alleged untrue statement of a material
fact contained in any part of the Registration Statement (or any
amendment thereto), when such part became effective, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they are made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, joint or several, to which such U.S.
Underwriter may become subject, under the Act or otherwise, to the
extent of the aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred by each
U.S. Underwriter (including, subject to Section 8(c) hereof, the fees
and disbursements of counsel chosen by the U.S. Underwriters),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Representatives, or by any U.S. Underwriter through the
Representatives, or by any International Manager expressly for use in the
Registration Statement (or any amendment thereto) or any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that the Company shall not be liable to any U.S.
Underwriter under the indemnity agreement in this Section 8(a) with respect
to any Preliminary Prospectus to the extent that any such loss, claim, damage
or liability of such U.S. Underwriter results from the fact that such U.S.
Underwriter sold Stock to a person as to whom it shall be established that
there was not sent or given, at or prior to the written con rmation of such
sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented (in either case excluding documents incorporated therein by
reference) in any case where such delivery is required by the Act if the
Company has previously furnished copies thereof in su cient quantity to such
U.S. Underwriter and the loss, claim, damage or liability of such U.S.
Underwriter results from an untrue statement or omission of a material fact
contained in the Preliminary Prospectus which was identi ed in writing at
such time to such U.S. Underwriter and corrected in the Prospectus or in the
Prospectus as then amended or supplemented (in either case excluding
documents incorporated therein by reference).
(b) Each U.S. Underwriter agrees to indemnify and hold harmless
the Company, each of its directors, each of its o cers who signed the
Registration Statement, and each person who controls the Company within the
meaning of the Act, to the same extent as the foregoing indemnity from the
Company to the U.S. Underwriters, but only to the extent the related untrue
statement or alleged untrue statement or omission or alleged omission was
made in the related document referred to in the foregoing indemnity in
reliance upon and in conformity with written information relating to the
Representatives furnished to the Company by the Representatives, or by such
U.S. Underwriter through the Representatives, expressly for inclusion in the
preparation of the documents referred to in the foregoing indemnity.
(c) Promptly after receipt by an indemni ed party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemni ed party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
or parties in writing of the commencement thereof; but the omission so to
notify the indemnifying party or parties shall not relieve it from any
liability that it may have to any indemni ed party otherwise than under such
subsection. In case any such action shall be brought against any indemni ed
party, and it shall notify the indemnifying party or parties of the
commencement thereof, the indemnifying party or parties shall be entitled to
participate in, and, to the extent that it shall elect, jointly with any
other indemnifying party similarly noti ed, by written notice delivered to
such indemni ed party promptly after receiving the aforesaid notice from such
indemni ed party, to assume the defense thereof, with counsel satisfactory to
such indemni ed party (who shall not, except with the consent of the
indemni ed party, be counsel to the indemnifying party); provided, however,
that if, in the judgment of such indemni ed party, a conflict of interest
exists where it is advisable for such indemni ed party to be represented by
separate counsel, the indemni ed party shall have the right to employ
separate counsel in any such action, in which event the fees and expenses of
such separate counsel shall be borne by the indemnifying party or parties,
and after notice from the indemnifying party or parties to such indemni ed
party of its election so to assume the defense thereof and approval by the
indemni ed party of counsel, the indemnifying party or parties shall not be
liable to such indemni ed party under such subsection for any legal or other
expenses subsequently incurred by such indemni ed party in connection with
the defense thereof unless (i) the indemni ed party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party or
parties shall not be liable for the expenses of more than one such separate
counsel representing the indemni ed parties under subparagraph (a) of this
Section 8 who are parties to such action), (ii) the indemnifying party or
parties shall not have employed counsel satisfactory to the indemni ed party
to represent the indemni ed party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party or parties have
authorized the employment of counsel for the indemni ed party at the expense
of the indemnifying party or parties; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) If the indemni cation provided for in this Section 8 is
unavailable or insu cient to hold harmless an indemni ed party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemni ed party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative bene ts received by the Company on the one hand and the
U.S. Underwriters on the other from the offering of the Stock to which such
loss, claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemni ed party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemni ed party in
such proportion as is appropriate to reflect not only such relative bene ts
but also the relative fault of the Company on the one hand and the U.S.
Underwriters on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative bene ts received by the Company on the one hand and the U.S.
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the U.S. Underwriters, in each case as set forth in
the table on the cover page of the U.S. Prospectus Supplement. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or the U.S. Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Company and the
U.S. Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro
rata allocation (even if the U.S. Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to above in this subsection (d).
The amount paid or payable by an indemni ed party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemni ed party in connection with
investigating or defending against any such action or claim. Notwithstanding
the provisions of this subsection (d), no U.S. Underwriter shall be required
to contribute any amount in excess of the amount by which the underwriting
discount for the Stock underwritten by it and distributed to the public
exceeds the amount of any damages which such U.S. Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The U.S. Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The U.S. Underwriters severally con rm that the statements
with respect to the public offering of the Stock set forth on the cover page
of, and under the caption "Underwriting" in, the Prospectus are correct and
constitute the only information furnished in writing to the Company by or on
behalf of the U.S. Underwriters speci cally for inclusion in the Registration
Statement and the Prospectus.
(f) All representations, warranties, and agreements of the
Company herein or in certi cates or letters of o cers delivered pursuant
hereto, and the agreements of the several U.S. Underwriters contained in this
Section 8, shall remain operative and in full force and effect regardless of
any termination of this Agreement or any investigation made by or on behalf
of the Company or any U.S. Underwriter or any controlling person, and shall
survive delivery of any Depositary Shares to the U.S. Underwriters.
9. Defaulting U.S. Underwriters. (a) If any of the U.S.
Underwriters or International Managers shall fail to take up and pay for the
amount of Stock or International Stock, as the case may be, agreed by such
U.S. Underwriter or International Manager to be purchased hereunder or under
the International Underwriting Agreement on any Delivery Date, upon tender of
such Stock or International Stock in accordance with the terms hereof or
thereof, and the amount of Stock and International Stock not purchased does
not aggregate more than 10% of the total amount of Stock and International
Stock that the U.S. Underwriters and International Managers are obligated to
purchase hereunder and thereunder on such Delivery Date, the remaining U.S.
Underwriters shall be obligated to take up and pay for (in proportion to
their respective underwriting obligations hereunder except as may otherwise
be determined by the Representatives) the Stock that the withdrawing or
defaulting U.S. Underwriters agreed but failed to purchase.
(b) If any U.S. Underwriters or International Managers shall
fail to take up and pay for the amount of Stock or International Stock, as
the case may be, agreed by such U.S. Underwriter or International Manager to
be purchased hereunder or under the International Underwriting Agreement on
any Delivery Date, upon tender of such Stock or International Stock in
accordance with the terms hereof or thereof, and the amount of Stock and
International Stock not purchased aggregates more than 10% of the total
amount of Stock and International Stock that the U.S. Underwriters and
International Managers are obligated to purchase hereunder and thereunder on
such Delivery Date, and arrangements satisfactory to you, the International
Managers and the Company for the purchase of such Stock and International
Stock by other persons are not made within 36 hours thereafter, this
Agreement shall terminate. In the event of any such termination the Company
shall not be under any liability to any U.S. Underwriter with respect to
Stock not purchased by reason of such termination (except to the extent
provided in Section 6 and Section 8 hereof) nor shall any U.S. Underwriter
(other than a U.S. Underwriter who shall have failed, otherwise than for some
reason permitted under this Agreement, to purchase the amount of Stock agreed
by such U.S. Underwriter to be purchased hereunder) be under any liability to
the Company with respect to such Stock (except to the extent provided in
Section 8 hereof).
10. Termination. The obligations of the U.S. Underwriters
hereunder may be terminated by the Representatives, in their absolute
discretion, by notice given to and received by the Company prior to delivery
of any payment for the Firm Stock if, prior to that time, any of the events
described in Sections 7(c) or 7(o) have occurred.
11. Notices, etc. All statements, request, notices and
agreements hereunder shall be in writing, and:
(a) if to the U.S. Underwriters, shall be delivered or
sent by mail, telex or facsimile transmission to Lehman Brothers
Inc., American Express Tower, World Financial Center, 200 Vesey
Street, New York, New York 10285; and
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: John
G. Amato, Esq., General Counsel;
provided, however, that any notice to a U.S. Underwriter pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to
such U.S. Underwriter at its address set forth in its acceptance telex to the
representatives, which address will be supplied to any other party hereto by
the Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company
shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the U.S. Underwriters by Lehman Brothers
Inc. on behalf of the Representatives.
12. Persons Entitled to Bene t of Agreement. This Agreement
shall inure to the bene t of, and be binding upon the U.S. Underwriters, the
Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole bene t of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be for the bene t
of the person or persons, if any, who control any U.S. Underwriter within the
meaning of Section 15 of the Act and for the bene t of each International
Manager (and controlling persons thereof) who offers or sells any shares of
Stock in accordance with the terms of the Agreement Between U.S. Underwriters
and International Managers and (B) the indemnity agreement of the U.S.
Underwriters contained in Section 8(b) of this Agreement shall be deemed to
be for the bene t of directors of the Company, o cers of the Company who have
signed the Registration Statement and any person controlling the Company
within the meaning of Section 15 of the Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. De nition of Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading, other than a day on which
banks are authorized or obligated by law or executive order to close in New
York City and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
15. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one or more counterparts, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Company and the U.S. Underwriters, please indicate your acceptance in the
space provided for the purpose below.
Very truly yours,
FREEPORT-MCMORAN COPPER & GOLD INC.
By: _____________________________
Accepted:
LEHMAN BROTHERS INC.
KIDDER, PEABODY & CO. INCORPORATED
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
S.G.WARBURG & CO. INC.
For themselves and as Representatives
for each of the several U.S. Underwriters
By: LEHMAN BROTHERS INC.
By: --------------------------------------
Authorized Representative
SCHEDULE 1
AMOUNT OF
DEPOSITARY
SHARES
TO BE
U.S. UNDERWRITER PURCHASED
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . . . . 312,500
Kidder, Peabody & Co. Incorporated . . . . . . . . . . . . . . . 312,500
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . 312,500
S.G.Warburg & Co. Inc. . . . . . . . . . . . . . . . . . . . . . 312,500
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . . . 70,000
CS First Boston Corporation . . . . . . . . . . . . . . . . . . . 70,000
Dean Witter Reynolds Inc. . . . . . . . . . . . . . . . . . . . . 70,000
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . . . 70,000
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . . 70,000
Kemper Securities, Inc. . . . . . . . . . . . . . . . . . . . . . 70,000
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . . . 70,000
Oppenheimer & Co., Inc. . . . . . . . . . . . . . . . . . . . . . 70,000
Robertson, Stephens & Company, L.P. . . . . . . . . . . . . . . . 70,000
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . . 70,000
Smith Barney Shearson Inc. . . . . . . . . . . . . . . . . . . . 70,000
Wertheim Schroder & Co. Incorporated . . . . . . . . . . . . . . 70,000
The Robinson-Humphrey Company, Inc. . . . . . . . . . . . . . . . 70,000
Advest, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Robert W. Baird & Co. Incorporated . . . . . . . . . . . . . . . 40,000
Cowen & Company . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Craigie Incorporated . . . . . . . . . . . . . . . . . . . . . . 40,000
Crowell, Weedon & Co. . . . . . . . . . . . . . . . . . . . . . . 40,000
Dain Bosworth Incorporated . . . . . . . . . . . . . . . . . . . 40,000
Doley Securities, Inc. . . . . . . . . . . . . . . . . . . . . . 40,000
Fahnestock & Co. Inc. . . . . . . . . . . . . . . . . . . . . . . 40,000
First Albany Corporation . . . . . . . . . . . . . . . . . . . . 40,000
Ladenburg, Thalmann & Co. Inc. . . . . . . . . . . . . . . . . . 40,000
Legg Mason Wood Walker, Incorporated . . . . . . . . . . . . . . 40,000
McDonald & Company Securities, Inc. . . . . . . . . . . . . . . . 40,000
Mesirow Financial, Inc. . . . . . . . . . . . . . . . . . . . . . 40,000
Pennsylvania Merchant Group Ltd . . . . . . . . . . . . . . . . . 40,000
Ragen MacKenzie Incorporated . . . . . . . . . . . . . . . . . . 40,000
Rauscher Pierce Refsnes, Inc. . . . . . . . . . . . . . . . . . . 40,000
Roney & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Scott & Stringfellow, Inc. . . . . . . . . . . . . . . . . . . . 40,000
Southcoast Capital Corporation . . . . . . . . . . . . . . . . . 40,000
Sutro & Co. Incorporated . . . . . . . . . . . . . . . . . . . . 40,000
Tucker Anthony Incorporated . . . . . . . . . . . . . . . . . . . 40,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
=========
Exhibit 4.5
ANNEX A
750,000 SHARES
FREEPORT-MCMORAN COPPER & GOLD INC.
DEPOSITARY SHARES, SERIES II
EACH REPRESENTING 0.05 SHARES OF
GOLD-DENOMINATED PREFERRED STOCK, SERIES II
(PAR VALUE $0.10 PER SHARE)
INTERNATIONAL UNDERWRITING AGREEMENT
January 13, 1994
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
KIDDER, PEABODY INTERNATIONAL LIMITED
MERRILL LYNCH INTERNATIONAL LIMITED
S.G. WARBURG SECURITIES LTD.
As Lead Managers (the "Lead Managers") for each of
the several International Managers named in Schedule 1,
c/o LEHMAN BROTHERS INTERNATIONAL (EUROPE)
1 Broadgate
London EC2M 7HA
England
Dear Sirs:
Subject to all of the terms and conditions herein set forth,
Freeport-McMoRan Copper & Gold Inc., a Delaware corporation (the "Company"),
proposes to sell to the International Managers named in Schedule 1 hereto
(the "International Managers") 750,000 shares (the "International Firm
Stock") of the Company's Depositary Shares, Series II (the "Depositary
Shares"), each representing 0.05 Shares of Gold-Denominated Preferred Stock,
Series II, par value $0.10 per share (the "Securities"), and to grant to the
International Managers an option to purchase up to an additional 105,594
Depositary Shares (the "International Option Stock"). The Securities are to
be deposited by the Company against delivery of Depositary Receipts
("Depositary Receipts") evidencing the Depositary Shares, which are to be
issued by Mellon Securities Trust Company, as depositary (the "Depositary"),
under a Deposit Agreement, to be dated as of January 15, 1994 (the "Deposit
Agreement"), among the Company, the Depositary and the holders from time to
time of the Depositary Receipts issued thereunder. The International Firm
Stock and the International Option Stock, if purchased, are hereinafter
collectively called the "Stock." This is to con rm the agreement concerning
the purchase of the Stock from the Company by the International Managers.
It is understood by all parties that the Company is concurrently
entering into an agreement dated the date hereof (the "U.S. Underwriting
Agreement") providing for the sale by the Company of up to 3,450,000
Depositary Shares (consisting of 3,000,000 shares of Firm Stock and up to
450,000 shares of Option Stock (each as de ned therein)) (the "U.S. Stock")
through arrangements with certain underwriters in the United States
2
(collectively, the "U.S. Underwriters"), for whom Lehman Brothers Inc.,
Kidder, Peabody & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith
Incorporated and S.G.Warburg & Co. Inc. are acting as representatives (the
"Representatives"). The International Managers and the U.S. Underwriters are
simultaneously entering into an agreement between the international and U.S.
underwriting syndicates (the "Agreement Between U.S. Underwriters and
International Managers") which provides for, among other things, the transfer
of Depositary Shares between the two syndicates. Two forms of prospectus are
to be used in connection with the offering and sale of Depositary Shares
contemplated by the foregoing, one relating to the Stock and the other
relating to the U.S. Stock. The latter form of prospectus will be identical
to the former except for certain substitute pages. Except as used in
Sections 2, 3, 4, 9 and 10 herein, and except as the context may otherwise
require, references herein to the Stock shall include all the Depositary
Shares which may be sold pursuant to either this agreement or the U.S.
Underwriting Agreement, and reference herein to any prospectus whether in
preliminary or nal form, and whether as amended or supplemented, shall
include both the international and the U.S. versions thereof.
1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 (File No. 33-66098)
with respect to, among other things, the Securities and the Depositary
Shares representing the Securities, including a prospectus, has been
carefully prepared by the Company in conformity with the requirements
of the Securities Act of 1933 ("Act") and the rules and regulations
("Rules and Regulations") of the Securities and Exchange Commission
("Commission") thereunder and led with the Commission and has become
effective. Such registration statement and prospectus may have been
amended or supplemented prior to the date of this Agreement; any such
amendment or supplement was so prepared and led and any such
amendment led after the effective date of such registration statement
has become effective. No stop order suspending the effectiveness of
the registration statement or preventing or suspending the use of any
Preliminary Prospectus (as hereinafter de ned) has been issued and no
proceeding for that purpose has been instituted or threatened by the
Commission. A prospectus supplement ("Prospectus Supplement") setting
forth the terms of the Securities and the Depositary Shares and of
their sale and distribution has been or will be so prepared and will
be led pursuant to Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations); and the Rules
and Regulations do not require the Company to, and, without the
consent of the Lead Managers, the Company will not, le a post-
effective amendment after the time of execution of this Agreement and
prior to the ling of such Prospectus Supplement (other than any
document led under the Securities Exchange Act of 1934 (the
"Exchange Act") that upon ling is deemed to be incorporated by
reference therein). Copies of such registration statement and
prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were led with the Commission
on or prior to the date of this Agreement (including one fully
executed copy of the registration statement and of each amendment
thereto for each of the Lead Managers and for counsel for the
International Managers) have been delivered to the Lead Managers.
Such registration statement, as it may have heretofore been amended,
is referred to herein as the "Registration Statement", and the nal
form of prospectus included in the Registration Statement, as
supplemented by the Prospectus Supplement, is referred to herein as
the "Prospectus". Each form of Prospectus, Prospectus Supplement, or
Prospectus and Prospectus Supplement, if any, heretofore made
available for use in offering the Securities is referred to herein as
a "Preliminary Prospectus". Any reference herein to the Registration
Statement, the Prospectus, any amendment or supplement thereto or any
Preliminary Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein, and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement or Prospectus shall be deemed to refer to the
ling of any document with the Commission deemed to be incorporated by
reference therein that has not heretofore been delivered to the Lead
Managers.
(b) Each part of the Registration Statement, when such part
became or becomes effective, each Preliminary Prospectus, on the date
of ling thereof with the Commission, and the Prospectus and any
amendment or supplement thereto, on the date of ling thereof with the
Commission and on each Delivery Date (as hereinafter de ned),
conformed or will conform in all material respects with the
requirements of the Act and the Rules and Regulations; each part of
the Registration Statement, when such part became or becomes
effective, did not or will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
each Preliminary Prospectus, on the date of ling thereof with the
Commission, and the Prospectus and any amendment or supplement
thereto, on the date of ling thereof with the Commission and on each
Delivery Date, did not or will not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that no representation or warranty
is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in
conformity with written information furnished to the Company by any
Lead Manager, through the Lead Managers by or on behalf of any
International Manager or by any U.S. Underwriter speci cally for
inclusion therein.
(c) The documents incorporated by reference in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any Preliminary Prospectus, when they became or become
effective under the Act or were or are led with the Commission under
the Exchange Act, as the case may be, conformed or will conform in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the Rules and Regulations of the Commission
thereunder.
(d) The consolidated nancial statements of the Company, P.T.
Freeport Indonesia Company, a limited liability company organized
under the laws of Indonesia and domesticated in Delaware ("PT-FI"),
Eastern Mining Company, Inc., a Delaware corporation ("EMC"), and
(where applicable) Rio Tinto Minera, S.A., a limited liability company
organized under the laws of Spain ("RTM"), and the consolidated
financial statements of RTM, included or incorporated by reference in
the Registration Statement and Prospectus present fairly the
consolidated nancial position of the Company, PT-FI, EMC and (where
applicable) RTM, and of RTM, respectively, as at the dates indicated
and the consolidated results of operations and cash flows of such
entities for the periods speci ed and have been prepared in conformity
with generally accepted accounting principles (in the case of RTM,
generally accepted accounting principles in Spain) applied on a
consistent basis during the periods involved, except as indicated
therein; and the unaudited pro forma nancial information included in
the Company's current report on Form 8-K dated April 13, 1993 (as
amended May 21, 1993 and August 5, 1993) complies as to form in all
material respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of such
statements.
(e) The Company does not have any subsidiaries that would
constitute signi cant subsidiaries within the meaning of Rule 405
under the Act other than PT-FI and RTM.
(f) Each of the Company, EMC and RTM has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; PT-FI has been
domesticated in the State of Delaware and is in good standing under
the laws of its jurisdiction of domestication and is a limited
liability company duly organized under the laws of the Republic of
Indonesia; each of the Company, PT-FI, EMC and RTM has full power and
authority (corporate and other) to own its properties and conduct its
business as described in the Registration Statement and Prospectus;
and each of the Company, PT-FI and EMC has been duly quali ed as a
foreign corporation for the transaction of business and is in good
standing to the extent applicable under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such quali cation, except where the failure
to be so quali ed or in good standing, considering all such cases in
the aggregate, does not involve a material risk to the business,
properties, nancial position or results of operations of the Company
and its subsidiaries.
(g) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, none of the Company, PT-FI,
EMC or RTM has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary
course of business, that are material to the Company and its
subsidiaries, and there has not been any material change, on a
consolidated basis, in the capital stock, short-term debt or long-term
debt of the Company and its subsidiaries (other than changes resulting
from exchanges of the Company's Zero Coupon Exchangeable Notes due
2011), or any material adverse change in the prospects, or any
material adverse change, or any development involving a prospective
material adverse change, in the condition ( nancial or other),
business, net worth or results of operations of the Company and its
subsidiaries.
(h) The Company has an authorized capitalization as set forth
in the Prospectus, and all the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; all the issued shares of capital stock of PT-
FI and EMC have been duly and validly authorized and issued, are fully
paid and non-assessable and the portion of such shares shown by the
Prospectus as bene cially owned by the Company are so owned subject to
no security interest, other encumbrance or adverse claim; and the
shares of RTM subscribed for by the Company constitute all the issued
and outstanding shares of RTM and the Company has good and marketable
title to such shares, free and clear of any mortgage, lien, pledge,
charge, security interest, encumbrance or other adverse claim of any
kind and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such
shares), subject to an agreement to sell ve percent of the stock of a
subsidiary of the Company that acts as a holding company for the
shares of RTM.
(i) The Securities and the Depositary Shares have been duly
authorized by the Company and the Securities, when issued and
delivered against payment therefor as contemplated hereby, will be
validly issued, fully paid and non-assessable; when the Depositary
Receipts are issued in accordance with the provisions of the Deposit
Agreement, such Depositary Receipts will entitle the holders thereof
to the rights speci ed in such Depositary Receipts and in the Deposit
Agreement; and the issuance of the Securities and the Depositary
Shares are not subject to the preemptive rights of any stockholder of
the Company.
(j) Neither the Company nor any of its agents or other persons
acting on its behalf (other than the International Managers or the
U.S. Underwriters, as to which no representation is made), has
marketed the Securities or the Depositary Shares as futures contracts
or commodity options or, except to the extent necessary to describe
the functioning of the Securities and Depositary Shares or to comply
with applicable disclosure requirements, as having the characteristics
of futures contracts or commodity options.
(k) The Deposit Agreement has been duly authorized, and when
duly executed and delivered by the Company, the Deposit Agreement will
constitute a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
persons in whose names such Depositary Receipts are registered will be
entitled to the rights speci ed in such Depositary Receipts and in the
Deposit Agreement.
(l) Pursuant to the terms of the Certi cate of Designations,
the Securities are subject to mandatory redemption, out of funds
legally available therefor, in whole by the Company on February 1,
2006.
(m) The Depositary Shares, the Deposit Agreement and the
Securities conform, or when so issued will conform, in all material
respects to the descriptions thereof contained in the Prospectus.
(n) The statements in the Prospectus under the captions
"Relationship of the Company Group with the FTX Group", "Description
of Preferred Stock" and "Description of Depositary Shares" and in the
Prospectus Supplement under the captions "Description of Gold-
Denominated Preferred Stock" and "Description of Depositary Shares",
insofar as such statements constitute summaries of the documents and
matters referred to therein, fairly and accurately present the
information called for with respect to such documents and matters.
(o) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened, any action,
suit or proceeding to which the Company, PT-FI, EMC or RTM is a party
before or by any court or governmental agency or body, which could
reasonably be expected to result in any material adverse change in the
condition ( nancial or other), business, prospects, net worth or
results of operations of the Company and its subsidiaries, or would
reasonably be expected to materially and adversely affect the
properties or assets thereof.
(p) The issuance and delivery of the Depositary Shares and the
Securities, the execution and delivery of this Agreement and the
Deposit Agreement by the Company, the consummation by the Company of
the transactions herein and therein contemplated, and the compliance
by the Company with the terms hereof and thereof do not and will not
conflict with, or result in a breach or violation of, any of the terms
or provisions of, or constitute a default under, the Certi cate of
Incorporation or By-laws, as amended (or analogous documents), of the
Company, PT-FI, EMC or RTM or the Certi cate of Domestication of PT-FI
or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company, PT-FI, EMC or RTM is a
party or by which any of their respective properties or assets are
bound, or any applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company, PT-FI, EMC
or RTM or any of their respective properties or assets (other than any
such conflict, breach, violation or default which, individually or in
the aggregate, would not have a material adverse effect on the
condition ( nancial or other), business, prospects, net worth or
results of operations of the Company and its subsidiaries taken as a
whole); and no consent, approval, authorization, order, registration
or quali cation of or with any government, governmental
instrumentality or court, domestic or foreign, including, without
limitation, the U.S. Commodity Futures Trading Commission (the
"CFTC"), is required for the valid authorization by the Company of the
Securities or the Depositary Shares, the issuance and delivery of the
Depositary Shares, the valid authorization, execution, delivery and
performance by the Company of this Agreement and the Deposit Agreement
or the consummation by the Company of the transactions contemplated by
this Agreement and the Deposit Agreement, except the ling with the
Secretary of State of the State of Delaware of a certi cate of
designations with respect to the Securities and except such consents,
approvals, authorizations, orders, registrations or quali cations as
are required under the Act and the securities or Blue Sky laws of the
various states in connection with the purchase by the International
Managers and distribution of the Securities and the Depositary Shares.
(q) This Agreement has been duly authorized, executed and
delivered by the Company.
(r) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Prospectus.
(s) There are no contracts or documents of the Company, PT-FI,
EMC or RTM that are required to be led as exhibits to the
Registration Statement or to any of the documents incorporated by
reference therein by the Act, the Exchange Act or the Rules and
Regulations of the Commission thereunder that have not been so led.
2. Purchase of Stock by the International Managers. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this Agreement, the Company agrees to sell 750,000
shares of the International Firm Stock to the several International Managers
and each of the International Managers, severally and not jointly, agrees to
purchase the number of shares of the International Firm Stock set opposite
that International Manager's name in Schedule 1 hereto, as such number may be
increased in accordance with Section 9.
In addition, the Company hereby grants to the International
Managers an option to purchase up to 105,594 shares of International Option
Stock. Such option is granted solely for the purpose of covering over-
allotments in the sale of International Firm Stock and is exercisable as
provided in Section 4 hereof. Shares of International Option Stock shall be
purchased severally for the account of the International Managers in
proportion to the number of shares of International Firm Stock set opposite
the name of such International Managers in Schedule 1 hereto. The respective
purchase obligations of each International Manager with respect to the
International Option Stock shall be adjusted by the Lead Managers so that no
International Manager shall be obligated to purchase International Option
Stock other than in 100 share amounts.
The purchase price of both the International Firm Stock and any
International Option Stock shall be $36.935 per share.
The Company shall not be obligated to deliver any of the Stock
to be delivered on the First Delivery Date or the Second Delivery Date (each,
as hereinafter de ned), as the case may be, except upon payment for all the
Stock (including the U.S. Stock) to be purchased on such Delivery Date as
provided herein and in the U.S. Underwriting Agreement.
3. Offering of Stock by the International Managers. Upon
authorization by the Lead Managers of the release of the International Firm
Stock, the several International Managers propose to offer the International
Firm Stock for sale upon the terms and conditions set forth in the
Prospectus.
Each International Manager agrees that, except to the extent
permitted by the Agreement Between U.S. Underwriters and International
Managers, (A) it is not purchasing any Stock for the account of any U.S.
Person (as de ned below) and (B) it has not offered or sold, and will not
offer, sell, resell or deliver, directly or indirectly, any of the Stock or
distribute any Preliminary Prospectus or Prospectus to any U.S. Person. As
used herein, the terms "United States" and "U.S." shall mean the United
States of America (including the states thereof and the District of Columbia)
and its territories, its possessions and other areas subject to its
jurisdiction, and the term "U.S. Person" shall mean any resident or national
of the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States or any estate or trust
the income of which is subject to United States federal income taxation
regardless of its source (other than a foreign branch of any U.S. Person),
and includes a United States branch of a person other than a U.S. Person.
Each International Manager hereby makes with the Company the agreements of
such International Manager contained in paragraphs (i) and (j) of Section 5
of the Agreement Among International Managers dated as of the date hereof
among the International Managers.
Each International Manager represents, warrants and agrees that
neither it nor any of its agents or other persons acting on its behalf has
marketed or will market the Securities or the Depositary Shares as futures
contracts or commodity options or, except to the extent necessary to describe
the functioning of the Securities and Depositary Shares or to comply with
applicable disclosure requirements, as having the characteristics of futures
contracts or commodity options; and the Lead Managers con rm to the Company
that each dealer who has marketed or will market the Securities or Depositary
Shares as a "Selected Dealer" at the written request of the Lead Managers has
agreed to comply with such limitations.
4. Delivery of and Payment for the Stock. Delivery of and
payment for the International Firm Stock shall be made at the o ce of Lehman
Brothers Inc., 388 Greenwich Street (Cashier's Window, Main Level), New York,
New York 10013, at approximately 10:00 a.m., New York City time, on the fth
full business day following the date of this Agreement or at such other date
or place as shall be determined by agreement between the Lead Managers and
the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certi cates representing the International Firm Stock
to the Lead Managers for the account of each International Manager against
payment to or upon the order of the Company of the purchase price by certi ed
or o cial bank check or checks payable in Federal (immediately available)
funds. Time shall be of the essence, and delivery of, and payment for, the
International Firm Stock at the time and place speci ed pursuant to this
Agreement is a further condition of the obligation of each International
Manager and the Company hereunder. Upon delivery, the International Firm
Stock shall be registered in such names and in such denominations as the Lead
Managers shall request in writing not less than two full business days prior
to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certi cates for the International Firm Stock, the Company
shall make the certi cates representing the International Firm Stock
available for inspection by the Lead Managers in New York, New York, not
later than 2:00 p.m., New York City time, on the business day prior to the
First Delivery Date.
At any time on or before the thirtieth day after the date of
this Agreement, the option granted in Section 2 may be exercised by written
notice being given to the Company by the Lead Managers. Such notice shall
set forth the aggregate number of shares of International Option Stock as to
which the option is being exercised, the names in which the shares of
International Option Stock are to be registered, the denominations in which
the shares of International Option Stock are to be issued and the date and
time, as determined by the Lead Managers, when the shares of International
Option Stock are to be delivered; provided, however, that this date and time
shall not be earlier than the First Delivery Date nor earlier than the third
business day after the date on which the option shall have been exercised nor
later than the fth business day after the date on which the option shall
have been exercised. The date and time the shares of International Option
Stock are delivered are sometimes referred to as the "Second Delivery Date"
and the First Delivery Date and the Second Delivery Date are each sometimes
referred to as a "Delivery Date."
Delivery of and payment for the International Option Stock shall
be made at the o ce of Lehman Brothers Inc., 388 Greenwich Street (Cashier's
Window, Main Level), New York, New York 10013 (or at such other place as
shall be determined by agreement between the Lead Managers and the Company)
at approximately 10:00 a.m., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be
delivered the certi cates representing the International Option Stock to the
Lead Managers for the account of each International Manager against payment
to or upon the order of the Company of the purchase price by certi ed or
o cial bank check or checks payable in Federal (immediately available) funds.
Time shall be of the essence, and delivery of, and payment for, the
International Option Stock at the time and place speci ed pursuant to this
Agreement is a further condition of the obligation of each International
Manager and the Company hereunder. Upon delivery, the International Option
Stock shall be registered in such names and in such denominations as the Lead
Managers shall request in the aforesaid written notice. For the purpose of
expediting the checking and packaging of the certi cates for the
International Option Stock, the Company shall make the certi cates
representing the International Option Stock available for inspection by the
Lead Managers in New York, New York, not later than 2:00 p.m., New York City
time, on the business day prior to the Second Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) The Company will cause the Prospectus Supplement to be
led as required by Section 1(a) hereof (but only if the Lead Managers
have not reasonably objected thereto by notice to the Company after
having been furnished a copy a reasonable time prior to ling) and
will notify the Lead Managers promptly of such ling; as long as a
prospectus is required to be delivered under the Act in connection
with the sale of the Depositary Shares, the Company will notify the
Lead Managers promptly of the time when any subsequent amendment to
the Registration Statement has become effective or any subsequent
supplement to the Prospectus has been led (and furnish the Lead
Managers with copies thereof) and of any request by the Commission for
any amendment or supplement to the Registration Statement or the
Prospectus or for additional information; it will prepare and le with
the Commission, promptly upon request of the Lead Managers, any
amendments or supplements to the Registration Statement or the
Prospectus that, in the opinion of the Lead Managers, may be necessary
or advisable in connection with the distribution of the Securities and
the Depositary Shares by the International Managers; it will le no
amendment or supplement to the Registration Statement or Prospectus
(other than any document led under the Exchange Act that upon ling
is deemed to be incorporated by reference therein) to which the Lead
Managers shall reasonably object by notice to the Company after having
been furnished a copy a reasonable time prior to the ling; and it
will furnish to the Lead Managers at or prior to the ling thereof a
copy of any document that upon ling is deemed to be incorporated by
reference in the Registration Statement or the Prospectus.
(b) The Company will advise the Lead Managers, promptly after
it shall receive notice or obtain knowledge thereof, of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement, of any order preventing or suspending the
use of any prospectus relating to the Securities or the Depositary
Shares, of the suspension of the quali cation of the Securities or the
Depositary Shares for offering or sale in any jurisdiction or of the
initiation or threatening of any proceeding for any such purpose; and
it will promptly use its best efforts to prevent the issuance of any
stop order or of any order preventing or suspending the use of any
prospectus relating to the Securities or the Depositary Shares or
suspending any such quali cation or to obtain its withdrawal if such a
stop order or order should be issued.
(c) Within the time during which a prospectus relating to the
Securities or the Depositary Shares is required to be delivered under
the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to
permit the continuance of sales of or dealings in the Securities or
the Depositary Shares as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period
it is necessary to amend or supplement the Registration Statement or
the Prospectus or to le under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act or the Exchange Act, the Company will promptly notify the Lead
Managers and will amend or supplement the Registration Statement or
the Prospectus or le such document (at the expense of the Company) so
as to correct such statement or omission or effect such compliance.
(d) The Company will arrange to qualify the Securities and the
Depositary Shares for sale under the securities laws of such
jurisdictions as the Lead Managers designate and will maintain such
quali cations in effect so long as required for the distribution of
such Securities and Depositary Shares, except that the Company shall
not be required in connection therewith to qualify as a foreign
corporation or to execute a general consent to service of process in
any such jurisdiction.
(e) Neither the Company nor any of its agents or other persons
acting on its behalf (other than the International Managers and the
U.S. Underwriters, as to which the Company makes no covenant) will
market the Securities or the Depositary Shares as futures contracts or
commodity options or, except to the extent necessary to describe the
functioning of the Securities and Depositary Shares or to comply with
applicable disclosure requirements, as having the characteristics of
futures contracts or commodity options.
(f) The Company will furnish to the Lead Managers and their
counsel without charge, conformed copies of the Registration Statement
as originally led and all amendments thereto, whether led before or
after such Registration Statement originally became effective
(including all exhibits thereto), and each Preliminary Prospectus, the
Prospectus (including all documents incorporated by reference therein)
and any amendments thereof and supplements thereto, in each case as
soon as available and in such quantities as the Lead Managers may from
time to time reasonably request.
(g) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 45
days after the end of the 12-month period beginning at the end of the
scal quarter of the Company during which the effective date of the
Registration Statement occurs, an earning statement of the Company (in
form complying with the provisions of Rule 158 under the Rules and
Regulations), covering such 12-month period that shall satisfy the
provisions of Section 11(a) of the Act, it being understood that the
Company intends to satisfy this requirement by ling of its annual
report on Form 10-K and its quarterly reports on Form 10-Q.
(h) The Company shall not, directly or indirectly, except with
the prior written consent of the Lead Managers, during the period
beginning from the date hereof and continuing to and including the day
90 days after the date hereof, offer, sell, contract to sell to any
person other than the International Managers or otherwise dispose of
any securities of the Company which are, or which are convertible or
exchangeable or exercisable for securities which are, substantially
similar to the Depositary Shares or the Securities (the "Restricted
Securities"), except for the Stock.
(i) The Company will promptly after the date hereof, in the
event it has not already done so, le an application for the listing
of the Depositary Shares on the New York Stock Exchange and will
arrange to cause such Depositary Shares to be duly authorized for
listing thereon, subject to o cial notice of issuance. The Company
will use its best efforts to cause the Depositary Shares to be
registered under the Exchange Act.
(j) During the period of ve years hereafter, the Company will
furnish to the Lead Managers, as soon as practicable after the end of
each scal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Lead Managers (i) as soon as
available, a copy of each report or de nitive proxy statement of the
Company led with the Commission under the Exchange Act or mailed to
shareholders and (ii) from time to time, such other information
concerning the Company as the Lead Managers may reasonably request.
6. Expenses. The Company, whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, will
pay or cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing,
ling and distribution of any Preliminary Prospectuses, the Prospectus, the
Registration Statement and any amendments thereof or supplements thereto,
(ii) the preparation, printing and distribution of this Agreement, the
International Managers' Questionnaire, the Agreement Among International
Managers, the Supplemental Agreement Among U.S. Underwriters, the
International Underwriting Agreement, the Agreement Between U.S. Underwriters
and International Managers, any Selling Agreement, the Securities, the
Depositary Receipts, the Deposit Agreement, the Certi cate of Designations,
the shares of Common Stock and any Blue Sky memoranda, (iii) the distribution
of the terms of agreement relating to the organization of the underwriting
syndicate and the selling group to the members thereof by mail, telex or
other means of communication, (iv) the issuance and delivery of the
Depositary Receipts to you, (v) the fees and disbursements of the Company's
counsel and accountants and other experts, (vi) the expenses of qualifying
the Securities and the Depositary Shares under state securities laws in
accordance with the provisions of Section 5(d), including ling fees and
reasonable fees and disbursements of your counsel in connection therewith and
in connection with any Blue Sky memoranda, (vii) the fees and expenses of the
Depositary and any agent of the Depositary, including the fees and
disbursements of counsel for the Depositary in connection with the Deposit
Agreement and the Depositary Shares, (viii) the fees and expenses, if any,
incurred in connection with the listing of the Depositary Shares on the New
York Stock Exchange and (ix) any ling fee of the National Association of
Securities Dealers, Inc. relating to the Securities. If the sale of the
Securities and the Depositary Shares provided for herein is not consummated
by reason of any failure, refusal or inability on the part of the Company to
perform any agreement on its part to be performed, or because any other
condition of your obligations hereunder required to be ful lled by the
Company is not ful lled, the Company will reimburse you for all reasonable
out-of-pocket disbursements (including reasonable fees and disbursements of
counsel) incurred by you in connection with your investigation, preparing to
market and marketing the Securities and the Depositary Shares or in
contemplation of performing your obligations hereunder. The Company shall
not in any event be liable to you for loss of anticipated pro ts from the
transactions covered by this Agreement.
7. Conditions of International Managers' Obligations. The
respective obligations of the International Managers hereunder are subject to
the accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company
of its obligations hereunder and to each of the following additional terms
and conditions:
(a) The Prospectus Supplement shall have been led as required
by Section 1(a) hereof; and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding
for that purpose shall have been instituted or threatened by the
Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
satisfaction of the Lead Managers.
(b) No International Manager or U.S. Underwriter shall have
advised the Company that the Registration Statement or Prospectus, or
any amendment or supplement thereto, contains an untrue statement of
fact that in the opinion of the Lead Managers is material, or omits to
state a fact that in the opinion of the Lead Managers or counsel for
the International Managers is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(c) Except as contemplated in the Prospectus, subsequent to
the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall not have been
any change, on a consolidated basis, in the capital stock (other than
changes resulting from issuances of shares of the Company's Class A
Common Stock, par value $0.10 per share (the "Common Stock"), in
connection with the conversion or exchange of any security of the
Company outstanding on the date as of which such information is
given), short-term debt or long-term debt of the Company and its
subsidiaries, or any adverse change in the prospects, or any adverse
change, or any development involving a prospective adverse change, in
the condition ( nancial or other), business, net worth or results of
operations of the Company and its subsidiaries or any change in the
rating assigned to any securities of the Company that, in the judgment
of the Lead Managers, makes it impractical or inadvisable to offer or
deliver the Depositary Shares on the terms and in the manner
contemplated in the Prospectus.
(d) The Lead Managers shall have received the opinion of Davis
Polk & Wardwell, special counsel for the Company, dated such Delivery
Date, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of its
jurisdiction of incorporation and PT-FI has been domesticated
and is in good standing under the laws of its jurisdiction of
domestication;
(ii) The Securities being delivered on such Delivery Date
have been duly authorized and validly issued and are fully paid
and non-assessable; and the issuance of such Securities is not
subject to the preemptive rights of any stockholder of the
Company;
(iii) The Depositary Shares being delivered on such Delivery
Date have been duly issued in accordance with the provisions of
the Deposit Agreement and the persons in whose names the
Depositary Receipts being delivered on such Delivery Date are
registered are entitled to the rights speci ed in such
Depositary Receipts and in the Deposit Agreement;
(iv) The Deposit Agreement has been duly authorized,
executed and delivered by the Company, and the Deposit Agreement
constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles;
(v) Pursuant to the terms of the Certi cate of
Designations, the Securities are subject to mandatory
redemption, out of funds legally available therefor, in whole by
the Company on February 1, 2006;
(vi) The statements in the Prospectus under the captions
"Relationship of the Company Group with the FTX Group",
"Description of Preferred Stock" and "Description of Depositary
Shares", and in the Prospectus Supplement under the captions
"Description of Gold-Denominated Preferred Stock" and
"Description of Depositary Shares", insofar as such statements
constitute summaries of the documents and matters referred to
therein, fairly and accurately present the information called
for with respect to such documents and matters;
(vii) The Registration Statement has become effective under
the Act; the Prospectus Supplement has been led as required by
Section 1(a) hereof; and to the best knowledge of such counsel
no stop order suspending the effectiveness of the Registration
Statement or order preventing or suspending the use of any
prospectus relating to the Securities or the Depositary Shares
has been issued under the Act and no proceedings for that
purpose have been instituted or threatened;
(viii) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or
supplement thereto, on the date of ling thereof with the
Commission, complied as to form in all material respects with
the requirements of the Act and the Rules and Regulations; and
such counsel has no reason to believe that any such part of the
Registration Statement, when such part became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the
Prospectus, as of its date and on such Delivery Date, and any
amendment or supplement thereto, as of the date thereof and on
such Delivery Date, contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; it being understood that
such counsel need express no opinion as to the nancial
statements or other nancial data included or incorporated by
reference in any of the documents mentioned in this clause
(viii);
(ix) This Agreement has been duly authorized, executed and
delivered by the Company;
(x) The issuance and delivery by the Company of the
Depositary Shares, the execution and delivery of this Agreement
and the Deposit Agreement by the Company, the consummation by
the Company of the transactions herein and therein contemplated
and compliance by the Company with the terms of this Agreement
and the Deposit Agreement, will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under (a) the charter or by-laws of the Company or PT-
FI, or (b) to the best of such counsel's knowledge, but without
any independent investigation, any Federal securities law of the
United States, any law of the State of New York or the Delaware
General Corporation Law, or of any order, writ, judgment,
decree, determination or award binding on the Company; and no
consent, approval, authorization or order of, or ling with, any
court or governmental agency or body, including, without
limitation, the CFTC, is required for the consummation of the
transactions contemplated by this Agreement, except (i) the
ling of the Certi cate of Designations which has been made
prior to the First Delivery Date and (ii) such as have been
obtained under the Act and such as may be required under state
laws in connection with the purchase and distribution of the
Depositary Shares by the several U.S. Underwriters; and
(xi) The offer and sale of the Depositary Shares and the
Securities do not violate the United States Commodity Exchange
Act, as amended (the "CEA"), or the rules and regulations of the
CFTC thereunder.
(e) The Lead Managers shall have received the opinion of
John G. Amato, Esq., General Counsel of the Company, dated such
Delivery Date, to the effect that:
(i) Each of the Company and PT-FI has full power and
authority (corporate and other) to conduct its business as
described in the Prospectus and is duly quali ed to do business
in each jurisdiction in which it owns or leases real property or
in which the conduct of its business requires such quali cation
except where the failure to be so quali ed, considering all such
cases in the aggregate, does not involve a material risk to the
business, properties, nancial position or results of operations
of the Company and its subsidiaries;
(ii) The documents incorporated by reference in the
Prospectus, when they were led with the Commission, complied as
to form in all material respects with the requirements of the
Exchange Act and the Rules and Regulations thereunder; and such
counsel believes that none of such documents, when such
documents were so led, contained an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such documents
were so led, not misleading, it being understood that such
counsel need express no opinion as to the nancial statements or
other nancial data included in any of the documents mentioned
in this clause (ii);
(iii) The descriptions in the Prospectus of statutes, legal
and governmental proceedings, contracts and other documents are
accurate and fairly present the information required to be
shown; and such counsel does not know of any statutes or legal
or governmental proceedings required to be described in the
Prospectus that are not described as required, or of any
contracts or documents of a character required to be described
in the Prospectus (or required to be led under the Exchange Act
if upon such ling they would be incorporated by reference
therein) or to be led as exhibits to the Registration Statement
that are not described and led as required;
(iv) The performance of this Agreement and the Deposit
Agreement and the consummation of the transactions herein and
therein contemplated will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, any statute, any agreement or instrument known to such
counsel to which the Company or PT-FI is a party or by which any
of them is bound or to which any of the property of any of them
is subject, or any order, rule or regulation known to such
counsel of any court or governmental agency or body having
jurisdiction over the Company or PT-FI or any of their
properties; and
(v) The Company has an authorized capitalization as set
forth in the Prospectus (other than changes resulting from
issuances of shares of Common Stock in connection with the
conversion or exchange of any security of the Company
outstanding on the date as of which such information is given);
all the issued shares of capital stock of PT-FI shown in the
Prospectus as bene cially owned by the Company have been duly
and validly authorized and issued, are fully paid and non-
assessable and are so owned subject to no security interest,
other encumbrance or adverse claim.
(f) The Lead Managers shall have received the opinion of
Miller & Chevalier, special tax counsel for the Company, dated such
Delivery Date, to the effect that the description contained under
"Certain Federal Income Tax Consequences" in the Prospectus Supplement
is complete, fair and accurate in all material respects.
(g) The Lead Managers shall have received the opinion of Ali
Budiardjo, Nugroho, Reksodiputro, special Indonesian counsel for the
Company, dated such Delivery Date, to the effect that:
(i) PT-FI has been duly organized and is an existing
corporation in good standing under the laws of Indonesia;
(ii) the Contract of Work, dated December 30, 1991, between
the Ministry of Mines of the Government of The Republic of
Indonesia, acting for such Government, and PT-FI (the "Contract
of Work"), has been duly authorized, executed and delivered by
and constitutes the valid and binding obligation of the parties
thereto, is in full force and effect and is enforceable in
accordance with its terms;
(iii) other than those already granted in or pursuant to the
Contract of Work and routine authorizations, permissions,
consents or approvals (including approvals required under
certain routine administrative regulations), which are of a
minor nature and which are customarily granted in due course
after application, or the denial of which would not materially
adversely affect the business, present or proposed, of PT-FI, no
registration with, or authorization or order of, The Government
of Indonesia or any subdivision thereof is required to permit
PT-FI to carry out its operations, including those described in
the Prospectus; to procure and import equipment and other
materials therefor; to export its products, or to construct,
equip, own, operate or maintain its assets or business; and
(iv) to the best of such counsel's knowledge after due
inquiry, other than routine tax audits conducted in accordance
with the terms of the Contract of Work, there is no action,
suit, proceeding or investigation by or before any Indonesian
court or governmental authority pending or threatened against or
affecting PT-FI or any of its properties or rights which, if
determined adversely to PT-FI, would in the aggregate have a
material adverse effect on its present or future business or
condition.
(h) The Lead Managers shall have received the opinion of J. &
A. Garrigues, special Spanish counsel for the Company, dated such
Delivery Date, to the effect that
(i) RTM has been duly incorporated and is an existing
corporation in good standing under the laws of its jurisdiction
of incorporation;
(ii) all issued and outstanding shares of the capital stock
of RTM (the "RTM Shares") have been duly and validly authorized,
issued and subscribed for by the Company pursuant to the
Subscription Agreement, dated as of January 28, 1993, among
Freeport-McMoRan Inc., RTM and Ercros, S.A. (the "Subscription
Agreement");
(iii) when payment in full for the RTM Shares has been made
in accordance with the terms of the Subscription Agreements, the
RTM Shares will be fully paid and nonassessable;
(iv) until such time as the RTM Shares are fully paid, the
maximum amount that may be assessed in respect of any such RTM
Share is the difference between its par value of Ptas. 500 and
the amount paid in respect of such share as of the date of such
assessment; and
(v) all RTM Shares are indirectly bene cially owned by the
Company and are so owned subject to no security interest, other
encumbrance or adverse claim.
(i) The Lead Managers shall have received from Sullivan &
Cromwell, counsel to the International Managers, such opinion or
opinions, dated such Delivery Date, with respect to the incorporation
of the Company, the validity of the Securities and the Depositary
Shares being delivered on such Delivery Date, the Deposit Agreement,
the Registration Statement, the Prospectus and other related matters
as the Lead Managers reasonably may request, and such counsel shall
have received such papers and information as they request to enable
them to pass upon such matters.
(j) The Lead Managers shall have received the opinion of
Cleary, Gottlieb, Steen & Hamilton, special commodities counsel to the
International Managers, dated such Delivery Date, to the effect that
the offer, sale, issuance and delivery by the Company of the
Securities and the Depositary Shares being delivered on such Delivery
Date in the manner contemplated by this Agreement, the U.S.
Underwriting Agreement and the Prospectus, the execution and delivery
of this Agreement, the U.S. Underwriting Agreement and the Deposit
Agreement and the performance by the Company of its obligations under
the terms of the Securities and the Depositary Shares will not violate
the CEA or the rules and regulations of the CFTC thereunder.
(k) At the time of execution of this Agreement and on each
Delivery Date, the Lead Managers shall have received a letter from
Arthur Andersen & Co., dated the date of delivery thereof, to the
effect that (i) they are independent certi ed public accountants with
respect to the Company and PT-FI within the meaning of the Act and the
Rules and Regulations and that the answer to Item 10 of the
Registration Statement form is correct insofar as it relates to them;
(ii) in their opinion, the nancial statements and schedules examined
by them included or incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects
with the applicable requirements of the Act or the Exchange Act, as
applicable, and the published Rules and Regulations thereunder;
(iii) based upon a review made in accordance with standards
established by the American Institute of Certi ed Public Accountants
of the unaudited consolidated condensed pro forma nancial information
incorporated by reference in the Registration Statement and the
Prospectus, nothing came to their attention that caused them to
believe that such unaudited pro forma consolidated condensed nancial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published rules
and regulations thereunder or that the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of
those statements; and (iv) as to such other matters as the Lead
Managers may reasonably request and in form and substance satisfactory
to the Lead Managers.
(l) At the time of execution of this Agreement and on each
Delivery Date, the Lead Managers shall have received a letter from
Coopers & Lybrand, S.A., dated the date of delivery thereof, to the
effect that they are independent certi ed public accountants with
respect to RTM within the meaning of the Act and the Rules and
Regulations.
(m) The Lead Managers shall have received from the Company a
certi cate, signed by the Chairman of the Board, the President or a
Vice President and by the principal nancial or accounting o cer,
dated such Delivery Date, to the effect that, to the best of their
knowledge based upon reasonable investigation:
(i) The representations and warranties of the Company in
this Agreement are true and correct, as if made at and as of
such Delivery Date, and the Company has complied with all the
agreements and satis ed all the conditions on its part to be
performed or satis ed at or prior to such Delivery Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for
that purpose has been instituted or is threatened by the
Commission; and
(iii) Since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement or
Prospectus that has not been so set forth, and there has been no
document required to be led under the Exchange Act and the
Rules and Regulations thereunder that upon such ling would be
deemed to be incorporated by reference in the Prospectus that
has not been so led.
(n) The Depositary Shares shall have been duly approved for
listing by the New York Stock Exchange, subject only to o cial notice
of issuance.
(o) On or after the date hereof there shall not have occurred
any of the following: (i) a suspension or limitation in trading in
the Common Stock or in securities generally on the New York Stock
Exchange or the American Stock Exchange or any setting of minimum or
maximum prices or ranges of prices for trading on any such Exchange;
(ii) a moratorium on banking activities in New York declared by either
Federal or New York State authorities; or (iii) any material adverse
change in the nancial markets in the United States or any outbreak or
escalation of hostilities or other calamity or crisis involving the
United States, or the declaration by the United States of a national
emergency or war, if the effect of any such event speci ed in clause
(iii) above in the judgment of the Lead Managers makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Depositary Shares to be purchased by the
International Managers.
(p) The Company shall have furnished to the Lead Managers such
further certi cates and documents as the Lead Managers shall have
reasonably requested.
(q) The closing under the U.S. Underwriting Agreement shall
have occurred concurrently with the closing hereunder on the First
Delivery Date.
All opinions, letters, evidence and certi cates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to
counsel for the International Managers.
8. Indemni cation and Contribution.
(a) The Company will indemnify and hold harmless each
International Manager and each person who controls each International Manager
within the meaning of the Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, joint or several, to which such
International Manager may become subject, under the Act or otherwise,
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any part of the Registration Statement (or
any amendment thereto), when such part became effective, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus
or the Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they are made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, joint or several, to which such
International Manager may become subject, under the Act or otherwise,
to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred by each
International Manager (including, subject to Section 8(c) hereof, the
fees and disbursements of counsel chosen by the International
Managers), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by the Lead Managers, or by any International Manager through the
Lead Managers, or by any U.S. Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or any Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto); and
provided, further, that the Company shall not be liable to any International
Manager under the indemnity agreement in this Section 8(a) with respect to
any Preliminary Prospectus to the extent that any such loss, claim, damage or
liability of such International Manager results from the fact that such
International Manager sold Stock to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
con rmation of such sale, a copy of the Prospectus or of the Prospectus as
then amended or supplemented (in either case excluding documents incorporated
therein by reference) in any case where such delivery is required by the Act
if the Company has previously furnished copies thereof in su cient quantity
to such International Manager and the loss, claim, damage or liability of
such International Manager results from an untrue statement or omission of a
material fact contained in the Preliminary Prospectus which was identi ed in
writing at such time to such International Manager and corrected in the
Prospectus or in the Prospectus as then amended or supplemented (in either
case excluding documents incorporated therein by reference).
(b) Each International Manager agrees to indemnify and hold
harmless the Company, each of its directors, each of its o cers who signed
the Registration Statement, and each person who controls the Company within
the meaning of the Act, to the same extent as the foregoing indemnity from
the Company to the International Managers, but only to the extent the related
untrue statement or alleged untrue statement or omission or alleged omission
was made in the related document referred to in the foregoing indemnity in
reliance upon and in conformity with written information relating to the Lead
Managers furnished to the Company by the Lead Managers, or by such
International Manager through the Lead Managers, expressly for inclusion in
the preparation of the documents referred to in the foregoing indemnity.
(c) Promptly after receipt by an indemni ed party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemni ed party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
or parties in writing of the commencement thereof; but the omission so to
notify the indemnifying party or parties shall not relieve it from any
liability that it may have to any indemni ed party otherwise than under such
subsection. In case any such action shall be brought against any indemni ed
party, and it shall notify the indemnifying party or parties of the
commencement thereof, the indemnifying party or parties shall be entitled to
participate in, and, to the extent that it shall elect, jointly with any
other indemnifying party similarly noti ed, by written notice delivered to
such indemni ed party promptly after receiving the aforesaid notice from such
indemni ed party, to assume the defense thereof, with counsel satisfactory to
such indemni ed party (who shall not, except with the consent of the
indemni ed party, be counsel to the indemnifying party); provided, however,
that if, in the judgment of such indemni ed party, a conflict of interest
exists where it is advisable for such indemni ed party to be represented by
separate counsel, the indemni ed party shall have the right to employ
separate counsel in any such action, in which event the fees and expenses of
such separate counsel shall be borne by the indemnifying party or parties,
and after notice from the indemnifying party or parties to such indemni ed
party of its election so to assume the defense thereof and approval by the
indemni ed party of counsel, the indemnifying party or parties shall not be
liable to such indemni ed party under such subsection for any legal or other
expenses subsequently incurred by such indemni ed party in connection with
the defense thereof unless (i) the indemni ed party shall have employed
separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party or
parties shall not be liable for the expenses of more than one such separate
counsel representing the indemni ed parties under subparagraph (a) of this
Section 8 who are parties to such action), (ii) the indemnifying party or
parties shall not have employed counsel satisfactory to the indemni ed party
to represent the indemni ed party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party or parties have
authorized the employment of counsel for the indemni ed party at the expense
of the indemnifying party or parties; and except that, if clause (i) or (iii)
is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) If the indemni cation provided for in this Section 8 is
unavailable or insu cient to hold harmless an indemni ed party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemni ed party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative bene ts received by the Company on the one hand and the
International Managers on the other from the offering of the Stock to which
such loss, claim, damage or liability (or action in respect thereof) relates.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemni ed party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemni ed party in
such proportion as is appropriate to reflect not only such relative bene ts
but also the relative fault of the Company on the one hand and the
International Managers on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative bene ts received by the Company on the one hand
and the International Managers on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the International Managers, in each
case as set forth in the table on the cover page of the U.S. Prospectus
Supplement. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the International
Managers on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the International Managers agree that it would not
be just and equitable if contributions pursuant to this subsection (d) were
to be determined by pro rata allocation (even if the International Managers
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemni ed party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above in this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemni ed party in connection with investigating or defending against
any such action or claim. Notwithstanding the provisions of this subsection
(d), no International Manager shall be required to contribute any amount in
excess of the amount by which the underwriting discount for the Stock
underwritten by it and distributed to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
International Managers' obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and not
joint.
(e) The International Managers severally con rm that the
statements with respect to the public offering of the Stock set forth on the
cover page of, and under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information furnished in writing to the
Company by or on behalf of the International Managers speci cally for
inclusion in the Registration Statement and the Prospectus.
(f) All representations, warranties, and agreements of the
Company herein or in certi cates or letters of o cers delivered pursuant
hereto, and the agreements of the several International Managers contained in
this Section 8, shall remain operative and in full force and effect
regardless of any termination of this Agreement or any investigation made by
or on behalf of the Company or any International Manager or any controlling
person, and shall survive delivery of any Depositary Shares to the
International Managers.
9. Defaulting International Managers. (a) If any of the
International Managers or U.S. Underwriters shall fail to take up and pay for
the amount of Stock or U.S. Stock, as the case may be, agreed by such
International Manager or U.S. Underwriter to be purchased hereunder or under
the U.S. UnderwritingAgreement on any DeliveryDate, upon tender ofsuch Stock-
or U.S. Stock in accordance with the terms hereof or thereof, and the amount
of Stock and U.S. Stock not purchased does not aggregate more than 10% of the
total amount of Stock and U.S. Stock that the International Managers and U.S.
Underwriters are obligated to purchase hereunder and thereunder on such
Delivery Date, the remaining International Managers shall be obligated to
take up and pay for (in proportion to their respective underwriting obliga-
tions hereunder except as may otherwise be determined by the Lead Managers)
the Stock that the withdrawing or defaulting International Managers agreed
but failed to purchase.
(b) If any International Managers or U.S. Underwriters shall
fail to take up and pay for the amount of Stock or U.S. Stock, as the case
may be, agreed by such International Manager or U.S. Underwriter to be
purchased hereunder or under the U.S. Underwriting Agreement on any Delivery
Date, upon tender of such Stock or U.S. Stock in accordance with the terms
hereof or thereof, and the amount of Stock and U.S. Stock not purchased
aggregates more than 10% of the total amount of Stock and U.S. Stock that the
International Managers and U.S. Underwriters are obligated to purchase
hereunder and thereunder on such Delivery Date, and arrangements satisfactory
to the Lead Managers, the Representatives and the Company for the purchase of
such Stock and U.S. Stock by other persons are not made within 36 hours
thereafter, this Agreement shall terminate. In the event of any such
termination the Company shall not be under any liability to any International
Manager with respect to Stock not purchased by reason of such termination
(except to the extent provided in Section 6 and Section 8 hereof) nor shall
any International Manager (other than an International Manager who shall have
failed, otherwise than for some reason permitted under this Agreement, to
purchase the amount of Stock agreed by such International Manager to be
purchased hereunder) be under any liability to the Company with respect to
such Stock (except to the extent provided in Section 8 hereof).
10. Termination. The obligations of the International Managers
hereunder may be terminated by the Lead Managers, in their absolute
discretion, by notice given to and received by the Company prior to delivery
of any payment for the Firm Stock if, prior to that time, any of the events
described in Sections 7(c) or 7(o) have occurred.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the International Managers, shall be delivered
or sent by mail, telex or facsimile transmission to Lehman
Brothers International (Europe), 1 Broadgate, London EC2M 7HA,
England, Attention: Syndicate Department; and
(b) if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: John
G. Amato, Esq., General Counsel;
provided, however, that any notice to an International Manager pursuant to
Section 8(c) shall be delivered or sent by mail, telex or facsimile
transmission to such International Manager at its address set forth in its
acceptance telex to the representatives, which address will be supplied to
any other party hereto by the Lead Managers upon request. Any such
statements, requests, notices or agreements shall take effect at the time of
receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the
International Managers by Lehman Brothers International (Europe) on behalf of
the Lead Managers.
12. Persons Entitled to Bene t of Agreement. This Agreement
shall inure to the bene t of, and be binding upon the International Managers,
the Company and their respective successors. This Agreement and the terms
and provisions hereof are for the sole bene t of only those persons, except
that (A) the representations, warranties, indemnities and agreements of the
Company contained in this Agreement shall also be deemed to be for the bene t
of the person or persons, if any, who control any International Manager
within the meaning of Section 15 of the Act and for the bene t of each
International Manager (and controlling persons thereof) who offers or sells
any shares of Stock in accordance with the terms of the Agreement Between
U.S. Underwriters and International Managers and (B) the indemnity agreement
of the International Managers contained in Section 8(b) of this Agreement
shall be deemed to be for the bene t of directors of the Company, o cers of
the Company who have signed the Registration Statement and any person
controlling the Company within the meaning of Section 15 of the Act. Nothing
in this Agreement is intended or shall be construed to give any person, other
than the persons referred to in this Section 13, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
13. De nition of Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the New
York Stock Exchange, Inc. is open for trading, other than a day on which
banks are authorized or obligated by law or executive order to close in New
York City and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
15. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one or more counterparts, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
16. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the
meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Company and the International Managers please indicate your acceptance in the
space provided for the purpose below.
Very truly yours,
FREEPORT-MCMORAN COPPER &
GOLD INC.
By: /s/ Michael C.
Kilanowski, Jr.
Accepted:
LEHMAN BROTHERS INTERNATIONAL (EUROPE)
KIDDER, PEABODY INTERNATIONAL LIMITED
MERRILL LYNCH INTERNATIONAL LIMITED
S.G. WARBURG SECURITIES LTD.
For themselves and as Lead Managers
for each of the several International
Managers named on Schedule 1 hereto
By: LEHMAN BROTHERS INTERNATIONAL (EUROPE)
By: /s/ Aaron D. Peck
Authorized Representative
SCHEDULE 1
AMOUNT OF
DEPOSITARY
SHARES
TO BE
INTERNATIONAL MANAGER PURCHASED
Lehman Brothers International (Europe) . . . . . . . . . . . .. . 133,500
Kidder, Peabody International Limited . . . . . . . . . . . . . 133,500
Merrill Lynch International Limited . . . . . . . . . . . . . . 133,500
S.G. Warburg Securities Ltd. . . . . . . . . . . . . . . . . . 133,500
ABN AMRO Bank N.V. . . . . . . . . . . . . . . . . . . . . . . 18,000
Banque Indosuez . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Barclays de Zoete Wedd Limited . . . . . . . . . . . . . . . . 18,000
Burns Fry Limited . . . . . . . . . . . . . . . . . . . . . . . 18,000
Commerzbank Aktiengesellschaft . . . . . . . . . . . . . . . . 18,000
Deutsche Bank Aktiengesellschaft . . . . . . . . . . . . . . . 18,000
Indosuez Capital Securities (UK) Limited . . . . . . . . . . . 18,000
NatWest Securities Limited . . . . . . . . . . . . . . . . . . 18,000
Nikko Europe Plc . . . . . . . . . . . . . . . . . . . . . . . 18,000
N M Rothschild & Sons Limited . . . . . . . . . . . . . . . . . 18,000
Socie'te' Ge'ne'rale . . . . . . . . . . . . . . . . . . . . . 18,000
UBS Limited . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . 750,000
