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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 1-9916
FREEPORT-McMoRan COPPER & GOLD INC.
Organized in Delaware I.R.S. Employer Identification No. 74-2480931
First Interstate Bank Building, One East First Street, Suite 1600, Reno,
Nevada 89501
Registrant's telephone number, including area code: (702) 688-3000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
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Class A Common Stock Par Value $0.10 New York Stock Exchange and
per Share Australian Stock Excahnge
Depositary Shares Representing 2-16/17 New York Stock Exchange
shares of Special Preference Stock
Par Value $0.10 per Share
Depositary Shares Representing 0.05 New York Stock Exchange
shares of Step-Up Convertible Preferred
Stock Par Value $0.10 per Share
Depositary Shares Representing 0.05 New York Stock Exchange
shares of Gold-Denominated Preferred
Stock Par Value $0.10 per Share
Depositary Shares, Series II, Representing New York Stock Exchange
0.05 shares of Gold-Denominated
Preferred Stock, Series II, Par Value
$0.10 per Share
Securities registered pursuant to Section 12(g) of the Act: None
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 ___
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. (X)
The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $1,607,239,000 on March 15, 1994.
On March 15, 1994, there were issued and outstanding 63,803,313 shares
of Class A Common Stock, par value $0.10 per share, of which 1,547,700
shares were held by the registrant's parent, Freeport-McMoRan Inc., and
142,129,602 shares of Class B Common Stock, par value $0.10 per share, all
of which were held by Freeport-McMoRan Inc.
Documents Incorporated by Reference
Portions of the registrant's Annual Report to stockholders for the year
ended December 31, 1993 (Parts I, II and IV) and portions of the Proxy
Statement dated March 31, 1994, submitted to the registrant's stockholders
in connection with its 1994 Annual Meeting to be held on May 5, 1994 (Part
III)
TABLE OF CONTENTS
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Part I................................................................ 1
Items 1 and 2. Business and Properties.............................. 1
Introduction...................................................... 1
P.T. Freeport Indonesia Company................................... 1
Contract of Work.................................................. 2
Ore Reserves...................................................... 2
Mining Operations................................................. 3
Exploration....................................................... 4
Milling, Expansion and Production................................. 6
Transportation and Other Infrastructure........................... 6
Marketing......................................................... 8
Republic of Indonesia............................................. 9
Rio Tinto Minera, S.A............................................. 10
Eastern Mining Company, Inc....................................... 10
Research and Development.......................................... 11
Environmental Matters............................................. 11
Employees......................................................... 12
Competition....................................................... 12
Item 3. Legal Proceedings.......................................... 12
Item 4. Submission of Matters to a Vote of Security Holders........ 13
Executive Officers of the Registrant................................ 13
Part II............................................................... 14
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters....................................... 14
Item 6. Selected Financial Data.................................... 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.--.................... 14
Item 8. Financial Statements and Supplementary Data................ 15
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.--.................... 15
Part III.............................................................. 15
Items 10, 11, 12, and 13. Directors and Executive Officers of
the Registrant, Executive Compensation, Security
Ownership of Certain Beneficial Owners and
Management, and Certain Relationships and Related
Transactions.............................................. 15
Part IV............................................................... 15
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K....................................... 15
Signatures............................................................ 16
Index to Financial Statements......................................... F-1
Report of Independent Public Accountants.............................. F-1
Exhibit Index......................................................... E-1
PART I
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Items 1 and 2. Business and Properties.
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INTRODUCTION
Freeport-McMoRan Copper & Gold Inc., a Delaware corporation formed
in 1987 ("FCX"), is a subsidiary of Freeport-McMoRan Inc. ("FTX"*).
FCX's principal operating subsidiary is P.T. Freeport Indonesia Company
("PT-FI"), a limited liability company organized under the laws of the
Republic of Indonesia and domesticated in Delaware. PT-FI engages in the
exploration for and development, mining, and processing of copper, gold
and silver in Indonesia and in the marketing of concentrates containing
such metals worldwide. FCX believes that PT-FI has one of the lowest
cost copper producing operations in the world, taking into account
customary credits for related gold and silver production. FTX owns
approximately 69.77% of FCX's common stock. FCX owns approximately 81.28%
of the outstanding common stock of PT-FI. Of the remaining 18.72% of the
outstanding PT-FI common stock, approximately 9.36% is owned by the
Government of the Republic of Indonesia (the "Government") and approximately
9.36% is owned by an Indonesian corporation, P.T. Indocopper Investama
Corporation ("PT-II"), in which FCX owns a 49% interest. FCX also has
a subsidiary, Eastern Mining Company, Inc., ("Eastern Mining") which on April
29, 1993 was granted an exploration permit, giving it exclusive rights for a
limited period to explore for minerals on 2.5 million acres adjacent to
the 6.5 million acre exploration area covered by PT-FI's New
COW (as defined below). On March 30, 1993, FCX acquired a 65%
interest in the capital stock of Rio Tinto Minera, S.A. ("RTM"), a
company primarily engaged in the smelting and refining of copper
concentrates in Spain. In December 1993, RTM redeemed the remaining 35%
interest.
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*The term "FTX", as used in this report, means Freeport-McMoRan Inc.,
its divisions, and its direct and indirect subsidiaries and affiliates other
than FCX, or any one or more of them, unless the context requires Freeport-
McMoRan Inc. only.
In January 1994, FCX redeemed its Zero Coupon Exchangeable Notes due
2011 (the "Notes"). Of the $118.6 million Notes outstanding at the initiation
of the call, $118.3 million were exchanged into 6.7 million shares of FCX
Class A Common Stock prior to the redemption of the Notes. The balance was
redeemed for cash. Also in January 1994, FCX sold 4.3 million depositary
shares, each representing 0.05 shares of its Gold-Denominated Preferred Stock,
Series II to the public for net proceeds of $158.5 million. In August 1993,
FCX sold 6.0 million depositary shares, each representing 0.05 shares of its
Gold-Denominated Preferred Stock, to the public for net proceeds of $220.4
million. In July 1993, FCX sold 14.0 million depositary shares, each
representing 0.05 shares of its Step-Up Convertible Preferred Stock, to the
public for net proceeds of $340.7 million.
P.T. FREEPORT INDONESIA COMPANY
PT-FI's operations are located in the rugged highlands of the Sudirman
Mountain Range in the province of Irian Jaya, Indonesia, located on the
western half of the island of New Guinea. Over the last 25 years, PT-FI has
met an extraordinary combination of engineering and construction challenges to
develop its mining and milling complex and supporting infrastructure in one of
the least explored areas in the world. PT-FI's largest mine, Grasberg,
discovered in 1988, contains the largest single gold reserve and one of the
three largest open-pit copper reserves of any mine in the world. In order to
develop the Grasberg deposit, PT-FI undertook an expansion program in stages,
initially from 20,000 metric tons of ore per day ("MTPD") to 57,000 MTPD.
Expansion from 57,000 MTPD to 66,000 MTPD was completed in 1993 ahead of
schedule and within budget. PT-FI has begun work on a further expansion of
its overall mining and milling rate to 115,000 MTPD which is expected to be
completed by year-end 1995 and to result in annual production rates
approaching 1.1 billion pounds of copper and 1.5 million ounces of gold.
CONTRACT OF WORK
In 1967, PT-FI's predecessor, Freeport Indonesia, Incorporated, a
Delaware corporation, ("FII") and the Government entered into a contract of
work (the "1967 COW") governing FII's mining activities in Indonesia. From
1967 until the end of 1991, FII operated as the sole contractor for the
production and marketing of certain minerals from a 24,700 acre area (the
"1967 Mining Area"). On December 30, 1991, FII was merged into PT-FI in
Delaware and PT-FI and the Government signed a new contract of work (the "New
COW"), which superseded the 1967 COW. The New COW covers both the 1967 Mining
Area and a contiguous 6.5 million acre exploration area (the "New COW Area").
The New COW has a 30-year term, with provisions for two 10-year extensions
under certain conditions.
The New COW contains a provision under which PT-FI must progressively
relinquish its rights to the nonprospective parts of the New COW Area in
amounts equal to 25% of the 6.5 million acres at the end of each of three
specified periods, the first of which is set to expire on December 30, 1994,
unless further extended by the Ministry of Mines, and the last of which is set
to expire five to seven years after the signing of the New COW. In light
of these relinquishment provisions, PT-FI has implemented an active
exploration program with a focus on both what it believes to be the most
promising exploration opportunities in the New Cow Area as well as
identification of areas which appear to hold the least promise.
The New COW also 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 such facility is deemed to be
economically viable by PT-FI and the Government and is not
constructed by others. PT-FI is pursuing with other companies the
feasibility of constructing a copper smelting facility in Indonesia, in which
PT-FI would hold a minority interest and supply approximately one-half of the
smelter's currently anticipated copper concentrate requirements.
ORE RESERVES
Based upon published reports, FCX believes that PT-FI's Grasberg deposit
contains the largest single gold reserve and one of the three largest open-pit
copper reserves of any mine in the world. Proved and probable ore reserves at
December 31, 1993 were approximately 1,074.1 million tons* at an average grade
of 1.31% copper, 1.47 grams of gold per ton and 4.04 grams of silver per ton
compared with approximately 733.2 million tons of ore with an average grade of
1.47% copper, 1.72 grams of gold per ton and 3.87 grams of silver per ton at
December 31, 1992. Primarily as a result of the drilling operations at the
Grasberg mine (see "Mines in Production" below), PT-FI's proved and probable
copper and gold reserves as of December 31, 1993 have increased, net of
production since December 31, 1988 by approximately 319% and 574%,
respectively, and from year-end 1992 by 28% and 22%, respectively.
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* As used herein, "ton" refers to a metric ton, which is equivalent to
2,204.62 pounds on a dry weight basis.
This increase in proved and probable reserves, net of production,
reflects the addition of approximately 340.9 million tons of ore since
December 31, 1992 (a 46% increase) as the result of a drilling program that
includes data obtained from the surface down to approximately the 3,100 meter
elevation at the Grasberg ore body. PT-FI's proved and probable reserves at
Grasberg do not include reserves below the 3,100 meter level. PT-FI has begun
driving an adit (the "Amole adit") from the mill site to a point below the
currently delineated Grasberg ore body at the 2,900 meter level. The Amole
adit, expected to be completed in 1996, will facilitate further deep
exploration to delineate the extent of the Grasberg deposit below the 3,100
meter level. Preliminary drilling from the existing 3,700 meter adit
indicates significant additional mineralization below the existing proved and
probable reserves. There can be no assurance, however, that PT-FI's
exploration programs will result in the delineation of additional reserves in
commercial quantities. For further information with respect to the copper,
gold and silver content of proved and probable ore reserves of PT-FI,
reference is made to Note 11 to the financial statements of FCX referred to on
page F-1 hereof (the "FCX Financial Statements"), incorporated herein by
reference.
MINING OPERATIONS
Mines in Production
PT-FI currently has two mines in operation: the Ertsberg East and the
Grasberg, both within the 1967 Mining Area. PT-FI milled ore at an average
rate of approximately 57,600 MTPD in 1992 and 62,300 MTPD in 1993.
Open pit mining of the Grasberg ore body commenced in January 1990.
In 1993, Grasberg mine output totaled approximately 19.8 million tons of
ore, providing approximately 81% of total PT-FI ore production. Production
from the Grasberg ore body, averaged approximately 54,100 MTPD during 1993.
Ertsberg East is an underground mine which commenced production in
1980. Block caving operations are conducted in two separate zones of the
ore body with a common haulage level at 3,530 meters elevation. In 1993,
mine output from Ertsberg East totaled approximately 4.4 million tons of
ore and provided approximately 18% of total PT-FI ore production.
Production from Ertsberg East averaged approximately 12,200 MTPD during
1993. The Ertsberg East mine is expected to be depleted by the second half
of 1994 and production primarily from Grasberg, supplemented by production
from the Intermediate Ore Zone (the "IOZ") ore body (see "Mines in
Development" below), is expected to offset the Ertsberg East production.
Mines in Development
Three major additions to PT-FI's underground mining operations, which
are intended to replace existing underground production areas when they
become depleted, have previously been developed: the DOM (from the Dutch
word meaning "cathedral") ore body, the Deep Ore Zone (the "DOZ") ore body
and the IOZ ore body. The IOZ is located vertically between the Ertsberg
East and the DOZ ore bodies.
The DOM ore body's initial working level is some 380 meters above the
Erstberg East mining operation. The DOM ore body will initially be mined
using the block caving method. Pre-production development is complete and
the first block cave area has been prepared. All maintenance, warehouse
and service facilities are in place. Production at the DOM has been
deferred as a result of the continued increase in the Grasberg ore
reserves.
The mine being developed at the IOZ ore body is situated approximately
350 meters above the 2,900 meter level adit. Delineation drilling and pre-
production development began in 1991. The IOZ is being developed to
gradually replace production from the Ertsberg East mine beginning in 1994
using the same block caving method. Mining will proceed downward from the
IOZ to the DOZ.
The DOZ, also an underground mine within the 1967 Mining Area, lies
vertically below the IOZ ore body and is currently capable of production.
Initial production from the DOZ commenced in 1989. However, at the end of
1991, mine output from the DOZ was temporarily suspended, and it is
anticipated that it will resume once the IOZ ore body has been depleted
sometime after 1998.
EXPLORATION
In addition to continued delineation of the Grasberg deposit and other
deposits discussed above, PT-FI is continuing its ongoing exploration program
for copper and gold mineralization within the 1967 Mining Area. Two anomalous
zones in the vicinity of PT-FI's current mining activities are under active
exploratory drilling. The Big Gossan and Wanagon mineralizations are located
west of the Erstberg open pit, southwest of the Grasberg ore body and anchor
the ends of a clearly defined mineralized structure trending roughly east-west
for 4.5 kilometers. The Big Gossan mineralization, as drilled to date,
extends approximately 1,100 meters from just east of the intersection of the
Amole adit.
Over 50 holes have been drilled from the Amole adit and from an
exploration drift being driven in a westerly direction parallel to the Big
Gossan structure, which drilling resulted in the addition of 8.5 million
metric tons of ore at an average grade of 2.4% copper and 0.77 grams of gold
per metric ton to PT-FI's total proved and probable reserves at December 31,
1993. Earlier surface drilling of the western portion of the Big Gossan
anomaly, approximately 300-500 meters west of the underground drilling,
established a mineral resource in excess of 6 million metric tons with an
average grade of 5% copper and 2.9 grams of gold per metric ton which is not
included in PT-FI's total proved and probable reserves at December 31, 1993.
Further underground exploration of the resources established by the surface
drilling as well as the area between it and the reserves discovered near the
Amole adit will be carried out in 1994 from the exploration drift as it is
extended.
Mine planning for development of the Big Gossan resource has commenced
with development estimated to cost approximately $100 million and to begin in
late 1994 or early 1995.
During the first quarter of 1993, PT-FI initiated helicopter-supported
surface drilling of the Wanagon gold/silver/copper prospect. Seven holes were
drilled during 1993 at Wanagon, located approximately 2 kilometers northwest
of Big Gossan and approximately 3 kilometers southwest of Grasberg.
Significant copper values have been encountered below the 2,900 meter
elevation. Target evaluation in other parts of the 1967 Mining Area is also
continuing.
Preliminary exploration of the New COW Area has indicated many promising
targets. Extensive stream sediment sampling within the new acreage has
generated analytical results which are being evaluated. This sampling
program, when coupled with regional mapping completed on the ground and from
aerial photographs, has led to the outlining of over 50 exploration targets.
PT-FI has also completed a fixed-wing air-magnetometer survey of the
entire New COW Area. Detailed follow-up exploration of these anomalies by
additional mapping and sampling and through the use of both aerial and
ground magnetic surveys is now in progress. Systematic drilling of these
targets has already commenced with mineralization being discovered at
several prospects. Additional drilling is required to determine if any of
these are commercially viable.
PT-FI has focused its initial drilling in the New COW Area on two
prospects 30 kilometers and 40 kilometers north of Grasberg that display
anomalous geochemical and magnetic characteristics. Although these prospects
require additional exploratory drilling, initial results indicate a large
mineralized district that covers three times the aerial extent or
approximately 75,000 acres when compared to the original 24,700-acre district
that contained the Ertsberg, Grasberg, Ertsberg East, IOZ, DOZ, Big Gossan and
DOM ore bodies. The discovery of widespread igneous activity, including
volcanic rocks, in these new areas indicates the potential for Grasberg-type
stockwork and porphyry deposits as well as skarn-type copper/gold deposits
similar to the Ertsberg, Ertsberg East, IOZ, DOZ and DOM ore bodies. PT-FI has
also initiated drilling programs for four other prospects. Drilling results
are being interpreted. No assurance can be given that any of these new areas
contain commercially exploitable mineral deposits.
PT-FI's exploration expenditures were $31.7 million for 1993, compared to
$12.2 million for 1992.
MILLING, EXPANSION AND PRODUCTION
Milling
Most of the ore from PT-FI's mines moves by a conveyor system to an ore
pass through which it drops to the mill site. At the mill site, which is
located approximately 2,900 meters above sea level, the ore is crushed and
ground. The powdered ore is then mixed in tanks with chemical reagents and
continuously agitated with air. At this stage the copper-bearing concentrate
rises to the top of the tanks from which it is removed and thickened. The
product leaves the mill site as a thickened concentrate slurry, consisting of
approximately 65% solids by weight. During 1993, the recovery rates for the
milling facilities averaged approximately 87.0% of the copper content, 76.2%
of the gold content and 67.2% of the silver content of the ore processed,
compared to 88.2%, 73.7% and 65.5%, respectively, during 1992.
Expansion
In 1993 PT-FI completed, within budget and ahead of schedule, the
expansion of its production facilities increasing its mining and milling
capacity from 57,000 MTPD to 66,000 MTPD at its Indonesian complex. During
1993 mill production averaged 62,300 MTPD. PT-FI has begun work on a further
expansion of its overall mining and milling rate to 115,000 MTPD at an
estimated cost of approximately $685 million, excluding the capital required
for the Enhanced Infrastructure Project (the "EIP") and other infrastructure
improvements, of which approximately $120 million had been spent through
December 31, 1993. This expansion is expected to be completed by or about
year end 1995. Funding for this expansion will be obtained from existing cash
balances, cash flow from operations and additional financing, if required.
Such expansion beyond 66,000 MTPD will also require certain Government
approvals. This expansion will further PT-FI's goal of approaching annual
copper production of 1.1 billion pounds and annual gold production of
approximately 1.5 million ounces.
Production
In 1993 PT-FI achieved record copper production of 658.4 million
recoverable pounds, approximately 6% more than in 1992. Gold production was a
record 786,700 recoverable ounces, an increase of approximately 23% over 1992.
For a summary of PT-FI's production, sales and average product realizations
for 1993 and the previous four years, reference is made to "Selected Financial
and Operating Data" appearing on page 17 of FCX's 1993 Annual Report to
stockholders, which is incorporated herein by reference.
TRANSPORTATION AND OTHER INFRASTRUCTURE
Transportation
From the mill site, the thickened concentrate is pumped through two 115
kilometer pipelines to the port-site facility at Amamapare. At the port-site
the slurry is filtered, dried and stored for shipping. When ships arrive,
they are loaded at the dock facilities at the port-site until they draw their
maximum water. The ships then normally move to deeper water, where loading is
completed from shuttling barges.
Other Infrastructure
The location of PT-FI's operations in a remote and undeveloped area
requires that such operations be virtually self-sufficient. The facilities,
in addition to those described above, include an airport, a heliport, a 119
kilometer road with bridges and tunnels, an aerial service tramway to
transport personnel, equipment and supplies to the mines, a hospital and two
town sites with schools, housing and other required facilities sufficient to
support approximately 12,000 persons, including approximately 360 who are
located at the port-site.
In conjunction with the expansion of the mining and processing
facilities to 115,000 MTPD, the first phase of the EIP is being implemented.
The EIP is a long term program created (1) to provide certain infrastructure
facilities needed for PT-FI's operations, (2) to enhance the quality of
conditions for PT-FI's employees and (3) to develop and promote the growth of
local and other third party activities and enterprises in Irian Jaya through
the construction of certain required physical support facilities. The full EIP
includes plans for various commercial, residential, educational, retail,
medical, recreational, environmental and other infrastructure facilities to be
constructed during the next ten to twenty years. Depending on the long-term
growth of PT-FI's operations, the total cost of the EIP could range between
$500 million and $600 million. The first phase of the EIP is needed to support
the 115,000 MTPD expansion. FCX anticipates that the first phase, which
includes various residential, community and commercial facilities and an
extension of the principal road which will enable vehicle traffic to travel
all the way to the port-site, will be completed by mid-1996.
PT-FI has entered into certain agreements with Huarte S.A. ("Huarte"), a
Spanish construction and engineering company. These agreements cover the
design, engineering and construction of the facilities to be constructed in
the first phase of the EIP. Together, the agreements give Huarte
responsibility to deliver completed facilities to PT-FI.
In March 1993, PT-FI entered into a joint venture agreement with P.T.
ALatieF Nusakarya Corporation ("ALatieF"), an Indonesian investor, pursuant to
which PT-FI will sell to a joint venture or ventures (the "ALatieF Joint
Venture") certain existing infrastructure assets and certain assets to be
constructed as part of the EIP for total consideration of $270 million. The
ALatieF Joint Venture, which is owned one-third by PT-FI and two-thirds by
ALatieF, is expected to purchase approximately $90 million of EIP assets
annually over the period 1993-1995, with funding provided by equity
contributions from the ALatieF Joint Venture partners ($90 million) and debt
financing ($180 million), which is expected to be guaranteed by PT-FI, FCX or
both. The sale of the first group of assets to the ALatieF Joint Venture,
primarily dormitory-style residential properties and associated food service
facilities, was completed in December 1993, for a price of $90 million. The
sales which are anticipated for 1994 and later are subject to the execution of
definitive agreements and certain Government approvals.
The acquired assets will be made available to PT-FI and its employees and
designees under arrangements which will provide the ALatieF Joint Venture with
a guaranteed minimum rate of return on its investment. Certain existing EIP
related contracts with Huarte will be assigned to the ALatieF Joint Venture as
appropriate.
In December 1993, PT-FI announced the execution of a Letter of Intent
with Duke Energy Corp. ("DE") and PowerLink Corporation ("PL"), pursuant to
which PT-FI would sell its existing and to be constructed power generation and
transmission assets and certain other power-related assets to a joint venture
(the "Power Joint Venture") whose ownership would consist of DE (30%), PL
(30%), PT-FI (30%) and an Indonesian investor (10%). The total value of the
transaction is estimated at $200 million and is expected to be concluded in
two phases. The first sale, representing the existing assets, is expected to
exceed $100 million and to occur in mid-1994. The final sale, representing
the to-be-constructed expansion-related assets, is expected to occur during
the first half of 1995. Under the agreement, the Power Joint Venture will own
these assets and be responsible for providing the electrical power services
required by PT-FI at its mining, milling and support operations in Irian Jaya,
Indonesia, including the power services required for the expansion of ore
throughput to 115,000 MTPD.
PT-FI has also entered into two separate letters of intent with respect
to the sale to joint ventures of certain aircraft, airport and related
operations (the "Airport Joint Venture") and certain construction equipment,
certain port facilities and related marine, logistics and related assets (the
"Port Joint Venture"). PT-FI would have a 25% equity interest in the Airport
Joint Venture, with certain Indonesian investors controlling the
remainder. PT-FI would enter into one or more agreements with the Airport
Joint Venture for air transport services for both passengers and cargo. It
is expected that the purchase price of the assets transferred to the
Airport Joint Venture will be approximately $30 million.
The Port Joint Venture is expected to be owned by a multinational
shipping concern and three to five Indonesian investors (one of which is
expected to be ALatieF). PT-FI is not expected to have an equity interest in
the Port Joint Venture. PT-FI would enter into one or more agreements with
the Port Joint Venture for use of the transferred assets. It is expected that
the purchase price of the assets transferred to the Port Joint Venture will
not exceed $100 million.
The foregoing letters of intent are not binding and are subject to the
execution of definitive agreements, financing, and certain Government
approvals. No assurance can be given that any of these transactions will be
consummated.
MARKETING
PT-FI's copper concentrates, which contain significant gold and silver
components, are sold primarily under long-term, U. S. dollar-denominated
contracts, pursuant to which the selling price is based on world metals
prices, generally the London Metal Exchange ("LME") settlement prices for
Grade A copper metal, less certain allowances. Under a major long-term
contract signed in late 1990, approximately 44% of the concentrates produced
by PT-FI in 1993 were sold to a group of Japanese copper smelting companies.
PT-FI also supplies copper concentrates to other Asian, European and North
American smelters and international trading companies under long-term sales
agreements. Virtually all of PT-FI's 1993 production of copper concentrates
was sold under prior commitments, and PT-FI has commitments from various
parties to purchase virtually all of its estimated 1994 production of copper
concentrates. For further detail with respect to sales of concentrates, see
Note 8 to the FCX Financial Statements.
For average realizations per recoverable pound of copper,
see "Selected Financial and Operating Data" on page 17 of
FCX's 1993 Annual Report to stockholders. PT-FI has in place a
price protection program that eliminates exposure to copper price declines
below an average $.90 per recoverable pound for estimated copper sales priced
during 1994, while allowing full benefit to PT-FI for prices above that
level. The cost of the 1994 price protection program, $6 million, is
included in product inventories and is being amortized as an adjustment to
revenues as sales are priced during 1994.
REPUBLIC OF INDONESIA
The economy of Indonesia is based on export commodity agriculture, the
extraction of petroleum, natural gas and other mineral resources, wholesale
and retail trade and, to an increasing extent, manufacturing. Indonesia has a
presidential republic system of government. President Suharto assumed power
in 1966 following an attempted communist coup and has been in power since
then. The Government has maintained a high degree of stability for the past
26 years. President Suharto was re-elected in March 1993 to serve a sixth
consecutive five-year term.
The Government has promoted policies designed to help develop Indonesia
economically and has encouraged foreign investment in numerous areas where
such investment would benefit the Indonesian economy. Indonesia's foreign
investment policy is expressed in the 1967 Foreign Capital Investment Law. It
provides basic guarantees of remittance rights and protection against
nationalization, a framework for incentives and some basic rules as to the
other rights and obligations of foreign investors. PT-FI's rights and
obligations relating to taxes, exchange controls, repatriation and other
matters are governed by the New COW, which was concluded pursuant to the 1967
Foreign Capital Investment Law.
PT-FI has had and continues to enjoy a good working relationship with
the Government. PT-FI's mining complex was Indonesia's first copper mining
project and was the first major foreign investment made in Indonesia following
the new economic development program instituted by the Suharto administration
in 1967. PT-FI works closely with the various levels of the Government in
development efforts in the vicinity of its operations. PT-FI incurs
significant costs associated with providing health and educational assistance,
job training, employment opportunities, agricultural assistance and other
community development services and facilities for the Indonesian people living
in the areas of its operations. In 1990 PT-FI established a foundation to
provide educational and work opportunities for the benefit of the people of
Irian Jaya. Over the next several years, PT-FI will contribute at least $10
million to the foundation for community projects. PT-FI also has in place a
long-term business development program to provide financing and support for
new and emerging businesses, many of which are expected to be suppliers of
goods and services for PT-FI's operations. Over time, PT-FI anticipates
investing $25 million in this program.
FCX has the benefit of political risk insurance from the Overseas
Private Investment Corporation, the Multilateral Investment Guaranty Agency
and other insurers, where available, which covers a portion of its interest in
PT-FI. The insurance is primarily designed to cover certain breach of
contract risks.
RIO TINTO MINERA, S.A.
In March 1993, FCX acquired a 65% interest in RTM, which is principally
engaged in the smelting and refining of copper in Spain, for approximately $50
million, excluding transaction costs. In December 1993, RTM redeemed the
remaining 35% interest for approximately $19 million. RTM has announced plans
to expand its smelter production capacity from its current 150,000 metric tons
of metal per year to approximately 180,000 metric tons of metal per year by
1995 at a cost of approximately $50 million. RTM is studying further
expansion to as much as 270,000 metric tons of metal production per year.
During 1993, PT-FI supplied RTM with approximately 90,000 metric tons of
copper concentrate and is expected to supply approximately 150,000 metric tons
in 1994, providing for approximately 20% and 33%, respectively, of RTM's
requirements in those years. Beginning in 1996, PT-FI is expected to provide
the RTM smelter with approximately one-half of its copper concentrate
requirements. For further information concerning RTM,
reference is made to the information set forth in Item 7 below.
EASTERN MINING COMPANY, INC.
FCX's subsidiary Eastern Mining was granted an exploration permit (the
"SIPP") in April 1993 which gives exclusive rights for a limited period to
explore for minerals on 2.5 million acres (the "SIPP Area") adjacent to the
New COW Area. Preliminary exploration of the SIPP Area is under way.
A draft of a contract of work ("Eastern Mining Draft") was initialled on
January 30, 1993 by the Ministry of Mines and Energy of Indonesia and Eastern
Mining which covers the SIPP Area. The Eastern Mining Draft will be submitted
to the President of Indonesia, with execution of a definitive contract of work
expected in 1994. The Eastern Mining Draft, as initialled, provides for a
30-year term and for two 10-year extensions under certain circumstances. Upon
execution, an Indonesian limited liability company will be formed to hold the
definitive contract of work which initially is to be owned 80% by Eastern
Mining and 10% by each of PT-II and an unrelated Indonesian corporation.
RESEARCH AND DEVELOPMENT
In February 1993, FTX outsourced its corporate engineering, research and
development, corporate environmental and corporate safety functions and, to
that end, contracted with a new company initially owned and staffed by former
employees of FTX, Crescent Technology, Inc. ("Crescent"), that furnishes
services to FTX. Crescent maintains engineering and mine development groups
in New Orleans, Louisiana, which provide engineering, design and construction
supervision activities required to implement new ventures and apply
improvements to existing operations of PT-FI and RTM.
ENVIRONMENTAL MATTERS
FTX and its affiliates, including FCX, have a history of commitment to
environmental responsibility. Since the 1940s, long before the general public
recognized the importance of maintaining environmental quality, FTX has
conducted, and continues to conduct, preoperational, bioassay, marine
ecological and other environmental surveys to determine the environmental
compatibility of its operations. FTX's Environmental Policy commits its
operations to full compliance with applicable laws and regulations. FTX has
contracted with Crescent whose environmental specialists develop and implement
environmental programs that include the activities of PT-FI.
The management of PT-FI believes that it is in compliance with
Indonesian environmental laws, rules and regulations. PT-FI had a team of
environmental scientists from a leading Indonesian scientific institution
conduct a study to update its 1984 Environmental Evaluation Study, with
particular focus on its 66,000 MTPD expansion program, and which addressed the
anticipated effect of PT-FI's expansion to 66,000 MTPD on the environment
within the study area including water quality, aquatic and terrestrial
biology, hydrology, geomorphology, oceanography, sociology and economics. The
study was submitted to the Government, and a formal hearing was held on the
document. The Government then requested PT-FI to update the document to
include future expansion plans. An additional environmental evaluation study
was submitted in late 1993 with respect to the proposed expansion of
production to 115,000 MTPD, and it was approved in February 1994.
PT-FI and RTM, through FTX, maintain insurance coverage in amounts
deemed prudent for certain types of damages associated with environmental
liabilities which arise from sudden, unexpected and unforeseen events.
PT-FI has made, and continues to make, expenditures at its operations
for protection of the environment. Government and public emphasis on
environmental matters can be expected to require PT-FI to incur additional
costs, which will be charged against income from future operations. It is
possible that the Government could revise its environmental laws and/or
regulations periodically. The impact, if any, of such possible revisions on
PT-FI's operations cannot be accurately predicted. However, PT-FI does not
anticipate that any investments which might be required will have a
significant adverse impact on its future operations, liquidity, capital
resources or financial position.
EMPLOYEES
In order to allow access to the FTX employee benefit plans for United
States citizens employed full time in PT-FI's and RTM's businesses, such
persons are formally employed by certain United States subsidiaries of FTX.
For all operational purposes, however, such individuals are regarded as
employees of PT-FI or RTM, respectively, and references herein to PT-FI or RTM
employees include such individuals.
FCX, PT-FI and FTX are parties to a Management Services Agreement (the
"Management Agreement") pursuant to which FTX furnishes general executive,
administrative, financial, accounting, legal, environmental, tax, research and
development, sales and certain other services to FCX and PT-FI. The term of
the Management Agreement is unlimited, subject to termination by any of the
parties on December 31 of any year and subject to at least six months' prior
written notice. FCX and PT-FI reimburse FTX at FTX's cost, including
allocated overhead, for such services on a monthly basis. For further
information with respect to the Management Agreement, including costs
reimbursed to FTX, reference is made to Note 9 to the FCX Financial
Statements.
As of December 31, 1993, PT-FI had a total of 6,054 employees
(approximately 94% Indonesian), compared with 4,983 employees (approximately
91% Indonesian) at year-end 1992. In addition, as of December 31, 1993, PT-FI
had approximately 6,600 contract workers, most of whom were Indonesian.
Approximately 40% of PT-FI's Indonesian employees are members of the All
Indonesia Workers' Union, which operates under Government supervision, with
which a labor agreement covering PT-FI's hourly paid Indonesian employees runs
until September 30, 1995. PT-FI experienced no work stoppages in 1993, and
relations with the union have generally been good. As of December 31, 1993,
RTM had a total of 1,216 employees, of which 1,003 employees are covered by
union contracts. RTM experienced limited work stoppages in 1993, but
relations with these unions have also generally been good.
COMPETITION
PT-FI competes with other mining companies in connection with the sale
of its mineral concentrates and the recruitment and retention of qualified
personnel. Some competing companies possess financial resources equal to or
greater than those of PT-FI. The management of FCX believes that PT-FI is one
of the lowest cost copper producers in the world, taking into account credits
for related gold and silver production.
Item 3. Legal Proceedings.
- ---------------------------
Although FCX may be from time to time involved in various legal
proceedings of a character normally incident to the ordinary course of its
business, the management of FCX believes that potential liability in any such
pending or threatened proceedings would not have a material adverse effect on
the financial condition or results of operations of FCX. FCX, through FTX,
maintains liability insurance to cover some, but not all, potential
liabilities normally incident to the ordinary course of its business as well
as other insurance coverages customary in its business, with such coverage
limits as management deems prudent.
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
Not applicable.
Executive Officers of the Registrant.
- -------------------------------------
In addition to the elected executive officers of FCX (the "Elected FCX
Executive Officers"), certain employees of affiliates of FCX are deemed by FCX
to be executive officers of FCX (the "Designated FCX Executive Officers") for
purposes of the federal securities laws. Listed below are the names and ages,
as of March 15, 1994, of each of the Elected FCX Executive Officers and the
Designated FCX Executive Officers, together with the principal positions and
offices with FCX, FTX, and PT-FI held by each. All officers of FCX, FTX, and
PT-FI are elected or appointed for one year terms, subject to death,
resignation or removal.
Name Age Position or Office
---- --- ------------------
Richard C. Adkerson 47 Senior Vice President of FCX.
Senior Vice President of FTX.
Commissioner of PT-FI.
John G. Amato 50 General Counsel of FCX.
General Counsel of FTX.
Commissioner of PT-FI.
Richard H. Block* 43 Senior Vice President of FTX.
Thomas J. Egan* 49 Senior Vice President of FTX.
Charles W. Goodyear 36 Senior Vice President of FCX.
Senior Vice President of FTX.
Commissioner of PT-FI.
Hoediatmo Hoed* 54 President Director of PT-FI.
W. Russell King* 44 Senior Vice President of FTX.
Rene L. Latiolais* 51 Director of FCX. Director,
President, and Chief Operating
Officer of FTX. Commissioner
of PT-FI.
George A. Mealey 60 Director, President, and Chief
Executive Officer of FCX.
Executive Vice President of FTX.
Director and Executive Vice
President of PT-FI.
James R. Moffett 55 Director and Chairman of the Board
of FCX. Director, Chairman of the
Board, and Chief Executive Officer
of FTX. President Commissioner of
PT-FI.
- --------------------
* This individual is a Designated FCX Executive Officer and not an
Elected FCX Executive Officer. He is deemed by FCX to be a Designated
FCX Executive Officer solely for purposes of the federal securities laws
in view of his position and responsibilities as an officer of FTX or PT-
FI, as applicable; he holds no actual position as an officer of FCX.
The individuals listed above, with the exceptions of Messrs. Adkerson,
Amato, and Goodyear, have served FCX, FTX, or PT-FI in various executive
capacities for at least the last five years. Until 1989, Mr. Adkerson was a
partner in Arthur Andersen & Co., an independent public accounting firm, and
Mr. Goodyear was a Vice President of Kidder, Peabody & Co. Incorporated, an
investment banking firm. During the past five years and prior to that period,
Mr. Amato has been engaged in the private practice of law and has served as
outside counsel to FCX, FTX, and PT-FI.
PART II
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Item 5. Market for Registrant's Common Equity and Related Stockholder
- -----------------------------------------------------------------------------
Matters.
--------
The information set forth under the caption "FCX Class A Common Shares"
and "Class A Common Share Dividends", on the inside back cover of FCX's 1993
Annual Report to stockholders, is incorporated herein by reference. As of
March 15, 1994, there were 2,355 record holders of FCX's Class A common stock.
Item 6. Selected Financial Data.
- ---------------------------------
The Information set forth under the caption "Selected Financial and
Operating Data", on page 17 of FCX's 1993 Annual Report to stockholders, is
incorporated herein by reference.
FCX's ratio of earnings to fixed charges for each of the years 1989
through 1993, inclusive, was 27.6x, 9.2x, 4.5x, 6.5x and 3.6x respectively.
For this calculation, earnings consist of income from continuing operations
before income taxes, minority interest and fixed charges. Fixed charges
include interest and that portion of rent deemed representative of
interest.
Item 7. Management's Discussion and Analysis of Financial
- -----------------------------------------------------------------
Condition and Results of Operations.
-----------------------------------
ORE RESERVE ADDITIONS AND ONGOING EXPLORATION PROGRAM
Total estimated proved and probable recoverable reserves at P.T. Freeport
Indonesia Company (PT-FI), Freeport-McMoRan Copper & Gold Inc.'s (FCX or the
Company) principal operating unit, have increased since December 31, 1992,
by 5.9 billion pounds of copper (a 28 percent increase), 7.0 million ounces
of gold (a 22 percent increase), and 32.0 million ounces of silver (a 72
percent increase), bringing PT-FI's total year-end 1993 estimated proved
and probable recoverable reserves to 26.8 billion pounds of copper, 39.1
million ounces of gold and 76.7 million ounces of silver. The increases,
net of production during the year, were added primarily at the Grasberg
deposit, but also include additions at the Company's underground mine at
the DOZ (Deep Ore Zone) deposit and the recently discovered Big Gossan
deposit.
In addition to continued delineation of the Grasberg deposit and other
deposits including Big Gossan, PT-FI is proceeding with its ongoing
exploration program for mineralization within the original mining area.
During 1993, PT-FI initiated helicopter-supported surface drilling of the
Wanagon gold/silver/copper prospect, located 1.5 miles northwest of Big
Gossan and 2 miles southwest of Grasberg, where seven holes were drilled.
Significant copper mineralization has been encountered below the 2,900
meter elevation.
Preliminary exploration of the new contract of work area (New COW
Area) has indicated numerous promising targets. Extensive stream sediment
sampling within the new acreage has generated analytical results which are
being evaluated. This sampling program, when coupled with regional mapping
completed on the ground and from aerial photographs, has led to the
outlining of over 50 exploration targets. PT-FI has also completed a
fixed-wing air-magnetometer survey of the entire New COW Area. Detailed
follow-up exploration of these anomalies by additional mapping and sampling
and through the use of both aerial and ground magnetic surveys is now in
progress. Systematic drilling of these targets has already commenced with
significant mineralization being discovered at several prospects.
Additional drilling is required to determine if any of these are
commercially viable. Initial surface and stream sampling began on an
additional 2.5 million acres, just north and west of our existing COW area,
on which an affiliate has an exploration permit and a pending COW.
1993 RESULTS OF OPERATIONS COMPARED WITH 1992
After discussions with the staff of the Securities and Exchange Commission
(SEC), FCX is reclassifying certain expenses and accruals previously
recorded in 1993 as restructuring and valuation of assets. In response to
inquiries, the Company advised the SEC staff that $15.5 million originally
reported as restructuring and valuation of assets represented the
cumulative effect of changes in accounting principle resulting from the
adoption of the new accounting policies that the Company considered
preferable, as described in Note 1 to the financial statements. The
Company also informed the SEC staff of the components of other charges
included in the amount originally reported as restructuring and valuation
of assets. The Company concluded that the reclassification and the related
supplemental disclosures more accurately reflect the nature of these
charges to 1993 net income in accordance with generally accepted accounting
principles. These reclassifications had no impact on net income or net
income per share.
FCX reported 1993 net income applicable to common stock of $21.9
million ($.11 per share) compared with net income of $122.9 million ($.66
per share) for 1992. The results for 1993 reflect (a) a $15.7 million loss
for Rio Tinto Minera, S.A. (RTM) since its acquisition (Note 3) and (b)
charges totaling $52.6 million ($30.4 million to net income or $.15 per
share), of which $28.3 million was noncash, related to (1) restructuring
the administrative organization at Freeport-McMoRan Inc. (FTX), the parent
company of FCX, (2) adjustments to general and administrative expenses and
site production and delivery costs discussed below, and (3) changes in
accounting principle, discussed further in Note 1 to the financial
statements. Operating income was lower in 1993 due to a lower gross margin
resulting primarily from lower copper realizations; higher exploration
expenses; administrative restructuring costs (Note 1); and higher general
and administrative costs. Also impacting net income were lower interest
expense resulting from reduced debt levels, a higher effective tax rate,
and an increase in preferred dividends (Notes 4 and 5).
Revenues in 1993 increased as a result of the acquisition of RTM,
adding sales of copper cathodes and anodes ($204.9 million), gold bullion
($57.4 million), and other products ($26.1 million). Excluding RTM,
revenues declined 4 percent when compared to 1992. Copper price
realizations, taking into account PT-FI's $.90 per pound price protection
program, were 12 percent lower than in 1992, but gold price realizations
were up 6 percent. Although ore production averaged 62,300 metric tons of
ore milled per day (MTPD) in 1993 (8 percent higher than in 1992), copper
sales volumes decreased slightly from 1992 primarily because of sales from
inventory in 1992. Gold sales volumes in 1993 benefited from significantly
higher fourth-quarter 1993 gold grades (a 46 percent increase over fourth-
quarter 1992 and a 38 percent increase over third-quarter 1993), which are
not anticipated to continue in 1994, and an increase in gold recovery rates
for the year which improve with higher gold grades. See Selected Financial
and Operating Data.
A reconciliation of revenues from 1992 to 1993 is presented below (in
millions):
Revenues - 1992 ........................................... $714.3
RTM revenues ........................................... 288.4
Elimination of intercompany sales.......................... (47.7)
Concentrate:
Price realizations:
Copper ............................................... (84.7)
Gold ............................................... 14.7
Sales volumes:
Copper ............................................... (5.5)
Gold ............................................... 30.2
Treatment charges 23.6
Adjustments to prior year concentrate sales ............. (13.0)
Other ............................................... 5.6
------
Revenues - 1993 $925.9
======
Revenues also benefited from a decline in treatment charges of 3.4
cents per pound from 1992, resulting from a tightening in the concentrate
market, as the industry's inventories were reduced for much of 1993.
Additionally, lower copper prices led to lower treatment charges since
these charges vary with the price of copper.
Adjustments to prior year concentrate sales include changes in prices
on all metals for prior year open sales as well as the related impact on
treatment charges. Open copper sales at the beginning of 1993 were
recorded at an average price of $1.04 per pound, but subsequently were
adjusted downward as copper prices fell during the year, negatively
impacting 1993 revenues. As of December 31, 1993, 213.4 million pounds of
copper remained to be contractually priced during future quotational
periods. As a result of PT-FI's price protection program, discussed below,
these pounds are recorded at $.90 per pound. The copper price on the
London Metal Exchange (LME) was $.84 per pound on February 1, 1994.
In June 1993, two of PT-FI's four mill level ore passes caved,
resulting in a blockage of a portion of the ore pass delivery system. The
blockage's primary effect was to limit mill throughput to approximately
40,700 MTPD for approximately eight weeks. The impact of the blockage was
minimized by using an ore stockpile adjacent to the mill and installing
conveyors to alternative ore pass systems. The ore pass blockage has been
rectified through the temporary use of alternative delivery systems and by-
passes. A permanent delivery system is expected to be in service by mid-
1994. The copper recovery rate for 1993 was adversely affected because the
ore milled from the stockpile contained higher than normal oxidized copper,
which yields lower copper recoveries. The Company's insurance policies are
expected to cover the property damage and business interruption claims
relative to the blockage.
PT-FI's unit site production and delivery costs, excluding the $10.0
million charge discussed below, increased slightly from 1992 primarily as a
result of costs incurred in connection with the ore pass blockage and an
increase in production overhead costs related to expansion activities.
Unit cash production costs declined significantly to 31.1 cents per pound
in 1993 from 40.7 cents per pound in 1992, benefiting from higher gold and
silver credits, lower treatment charges, and reduced royalties primarily
due to lower copper prices on which such royalties are based. PT-FI's
depreciation rate increased from 7.4 cents per recoverable pound during
1992 to 8.3 cents in 1993, reflecting the increased cost relating to the
66,000 MTPD expansion. As a result of the reserve additions discussed
earlier, PT-FI's depreciation rate is expected to decrease to 7.5 cents per
recoverable pound for 1994, absent any other significant changes in ore
reserves. In addition, FCX is amortizing costs in excess of book value
($2.4 million of amortization in 1993) relating to certain capital stock
transactions with PT-FI. Amortization of these excess costs is expected to
be $3.6 million per year starting in 1994.
Exploration expenditures in Irian Jaya totaled $31.7 million in 1993,
compared to $12.2 million in 1992 and are projected to be approximately $35
million in 1994. Exploration expenditures in Spain are expected to be
approximately $6 million in 1994.
FCX's general and administrative expenses increased from $68.5 million
in 1992 to $81.4 million in 1993 primarily because of the additional
personnel and facilities needed due to the expansion at PT-FI and the
acquisition of RTM. Included in the 1993 expense is $5.0 million for RTM
(since its acquisition in March 1993) and charges of $6.3 million primarily
consisting of a write-off of deferred charges incurred in 1992 related to a
planned securities offering that was withdrawn ($2.0 million) and costs to
downsize FCX's computing and management information systems (MIS) structure
($4.0 million).
Further increases in general and administrative expenses by FCX are
anticipated in conjunction with continuing expansion at PT-FI. General and
administrative expenses, including those of RTM, are currently expected to
increase by approximately 25 percent in 1994.
During the second quarter of 1993, FTX undertook a restructuring of
its administrative organization. This restructuring represented a major
step by FTX to lower its costs of operating and administering its
businesses in response to weak market prices of the commodities produced by
its operating units. As part of this restructuring, FTX significantly
reduced the number of employees engaged in administrative functions,
changed its MIS environment to achieve efficiencies, reduced its needs for
office space, outsourced a number of administrative functions, and
implemented other actions to lower costs. As a result of this
restructuring process, the level of FCX's administrative cost has been
reduced substantially over what it would have been otherwise, which benefit
will continue in the future. However, the restructuring process entailed
incurring certain one-time costs by FTX, portions of which were allocated
to FCX pursuant to its management services agreement with FTX.
FCX's restructuring costs totaled $20.8 million, including $10.7
million allocated from FTX based on historical allocations, consisting of
the following: $8.3 million for personnel related costs; $3.2 million
relating to excess office space and furniture and fixtures resulting from
the staff reduction; $6.1 million relating to the cost to downsize its
computing and MIS structure; and $3.2 million of deferred charges relating
to PT-FI's 1989 credit facility which was substantially revised in June
1993. As of December 31, 1993, the remaining accrual for these
restructuring costs totaled $1.5 million relating to excess office space.
In connection with the restructuring project, FCX changed its
accounting systems and undertook a detailed review of its accounting
records. As a result of this process, FCX recorded a $10.0 million charge
to site production and delivery costs comprised of the following: $5.0
million for materials and supplies inventory obsolescence; $2.5 million for
revised estimates of value added taxes and import duties related to prior
years; and $2.5 million of adjustments for various items identified in
converting its accounting system.
Interest expense was $15.3 million during 1993 compared with $18.9
million in 1992, excluding $24.5 million and $24.0 million of capitalized
interest, respectively.
The New 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 New COW and on dividends paid to FCX by PT-FI. The
additional withholding required on interest and on dividends paid to FCX by
PT-FI, and a $15.7 million loss by RTM for which no tax benefit is
recorded, results in a 1993 effective tax rate of 52 percent (Note 6).
TRENDS AND OUTLOOK - MARKETING
PT-FI's copper concentrates, which contain significant amounts of
recoverable gold and silver, are sold primarily under long-term sales
agreements which accounted for virtually all of PT-FI's 1993 sales. PT-FI
has commitments from various parties to purchase virtually all of its
estimated 1994 production. Concentrate sales agreements provide for
provisional billings based on world metals prices, primarily the LME,
generally at the time of loading. As is customary within the industry,
sales under these long-term contracts usually "final-price" within a few
months of shipment. Certain terms of the long-term contracts, including
treatment charges, are negotiated annually on a portion of the tonnage to
reflect current market conditions. Treatment charges have declined during
1993 as a result of the tightening in the concentrate market and are
expected to remain at or below 1993 levels. RTM has commitments from most
of its suppliers for 1994 treatment charge rates in excess of current spot
market rates.
The increased production at PT-FI has required it to market its
concentrate globally. Its principal markets include Japan, Asia, Europe
and North America. PT-FI's mill throughput is currently forecast to be
approximately 67,000 MTPD for 1994 as it continues to integrate new mill
equipment for the expansion to 115,000 MTPD. Current estimates for 1994
production are approximately 700 million pounds of copper and 780,000
ounces of gold for PT-FI and 165,000 ounces of gold at RTM. RTM, whose
smelter can be expanded, was acquired to provide low-cost smelter capacity
for a portion of PT-FI's concentrate and to improve PT-FI's competitive
position in marketing concentrate to other parties.
During 1993, copper prices dropped to their lowest levels since 1987,
reflecting lower demand caused by the continuing global recession, but
recovered to a level in excess of $.80 per pound. Prices for copper, gold,
and silver are influenced by many factors beyond the Company's control and
can fluctuate sharply. PT-FI has a price protection program for virtually
all of its estimated copper sales to be priced in 1994 at an average floor
price of $.90 per pound of copper, while allowing full benefit from prices
above this amount. Based on projected 1994 PT-FI copper sales of
approximately 720 million pounds, a 1 cent per pound change in the average
annual copper price received over $.90 per pound would have an
approximately $6 million effect on pretax operating income and cash flow.
Based on projected 1994 gold sales of approximately 800,000 ounces by PT-
FI, a $10 per ounce change in the average annual gold price received would
have an approximately $8 million effect on 1994 pretax operating income and
cash flow.
CAPITAL RESOURCES AND LIQUIDITY
Cash flow from operations decreased to $158.5 million during 1993
compared with $252.6 million for 1992, due primarily to lower net income
and an increase in inventories. Materials and supplies increased over
year-end 1992 as additional explosives, reagents and chemicals, fuel, and
spare parts are required for the expanding PT-FI operations. For the year
ended December 31, 1993, consolidated working capital decreased by $352.0
million from December 31, 1992, primarily as a result of a $358.0 million
decrease in cash and short-term investments, which was used to reduce long-
term debt and fund capital expenditures, and the negative working capital
position of RTM.
Cash flow used in investing activities totaled $463.5 million compared
with $579.7 million in 1992. Capital expenditures increased 23 percent in
1993 due to increased expansion activities. During 1992, FCX acquired an
indirect interest in PT-FI for $211.9 million.
Cash flow used in financing activities totaled $53.1 million compared
with $618.2 million provided by financing activities in 1992. FCX issued
shares of its Step-Up Preferred Stock and its Gold-Denominated Preferred
Stock during 1993 for net proceeds totaling $561.1 million. Net proceeds
from the two offerings were used in part to reduce borrowings under the PT-
FI amended credit agreement by a net $537.0 million, thereby increasing the
facility's availability for general corporate purposes and the continued
expansion of mining and milling operations. Also in 1993, the Company
received net proceeds of $80.0 million from the sale of a portion of PT-
FI's infrastructure assets (Note 10). In 1992, $212.5 million was received
from the sale of a 10 percent interest in PT-FI to Indonesian investors in
December 1991 and $392.0 million was received from the sale of Class A
common stock and Special Preference Stock. Dividend payments rose in 1993
due to increased Class A shares outstanding and dividends paid on the
Special Preference and Preferred Stock issued in 1992 and 1993. FCX called
its Zero Coupon Exchangeable Notes (Note 7) for redemption in January 1994
(substantially all of which were exchanged for Class A common stock) and
completed a public offering of its Gold-Denominated Preferred Stock, Series
II (Note 4) which yielded net proceeds of $158.5 million to be used
primarily for expansion related activities.
Cash flow from operations increased to $252.6 million during 1992
compared with $73.9 million for 1991, due primarily to higher net income.
Customer accounts receivable rose by $76.1 million to $130.6 million
because of increased sales. Partially offsetting the increase in
receivables was an increase in accounts payable and accrued liabilities
associated with expansion activities. Cash flow used in investing
activities increased to $579.7 million during 1992 compared with $240.0
million for 1991, due to increased capital expenditures for the 57,000 MTPD
expansion and the purchase of an indirect interest in PT-FI. Cash flow
from financing activities increased $415.8 million in 1992 compared with
1991, primarily due to the sale of Class A common stock, Special Preference
Stock, and a 10 percent interest in PT-FI to Indonesian investors. The
proceeds from these financing activities were used to purchase an indirect
interest in PT-FI and to fund ongoing expansion related expenditures.
RTM's principal operations currently consist of a copper smelter. The
FCX purchase proceeds will be used by RTM for working capital requirements
and capital expenditures, including funding a portion of the expansion of
its smelter production capacity (expected to cost approximately $50
million) from its current 150,000 metric tons of metal per year to 180,000
metric tons of metal per year by mid-1995. RTM is also studying further
expansion of the smelter facilities to as much as 270,000 metric tons of
metal production per year and is assessing the opportunity to expand its
tankhouse operations from 135,000 metric tons per year to 215,000 metric
tons per year. RTM's 1993 cash flow from operations was negative ($5.9
million) primarily due to cash requirements related to shut-down costs for
RTM's gold mine. RTM has relied on short-term credit facilities and the
FCX purchase proceeds to fund this shortfall. RTM is currently evaluating
financing alternatives to fund its short-term needs and to provide long-
term funding for expansion. 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 size and timing of the smelter and tankhouse
expansions, and the supply/demand for smelter capacity and its impact on
related treatment and refining charges.
During 1992, the Company established the Enhanced Infrastructure
Project (EIP). The full EIP (currently expected to involve aggregate cost
of as much as $500 million to $600 million) 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 1995.
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 in Note 10, 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.
Through 1995, 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 180,000 metric tons of
metal per year are expected to range from $850 million to $950 million and
will be funded by operating cash flow, sales of existing and to-be-
constructed infrastructure assets and a wide range of financing sources the
Company believes are available as a result of the future cash flow from PT-
FI's mineral reserve asset base. These sources include, but are not
limited to, PT-FI's credit facility and the public and private issuances of
securities (including the January 1994 public offering of Gold-Denominated
Preferred Stock, Series II).
The New 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, if it is deemed to be economically viable by PT-FI and the
Government of Indonesia (the Government). PT-FI has participated in a
group assessing the feasibility of constructing a copper smelting facility
in Indonesia.
PT-FI amended its $550.0 million credit agreement in June 1993. The
amended credit agreement, which, among other things eliminated a required
debt service reserve and provided a lower interest rate, is guaranteed by
FCX and FTX, and is structured as a three year revolving line of credit
followed by a 3 1/2 year reducing revolver. As of February 1, 1994, $425.0
million was available to PT-FI under the credit facility. To the extent
FTX and its other subsidiaries incur additional debt, the amount available
to PT-FI under the credit facility may be reduced (Note 7).
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.
PT-FI has had good relations with the Government since it commenced
operations in Indonesia in 1967. The New COW provides that the Government
will not nationalize the mining operations of PT-FI or expropriate assets
of PT-FI. Disputes under the New COW are to be resolved by international
arbitration. The 1967 Foreign Capital Investment Law, which expresses
Indonesia's foreign investment policy, provides basic guarantees of
remittance rights and protection against nationalization, a framework for
incentives and some basic rules as to other rights and obligations of
foreign investors.
ENVIRONMENTAL
FTX and affiliates, including FCX, have a history of commitment to
environmental responsibility. Since the 1940s, long before public
attention focused on the importance of maintaining environmental quality,
FTX has conducted preoperational, bioassay, marine ecological, and other
environmental surveys to ensure the environmental compatibility of its
operations. FTX's Environmental Policy commits FTX's operations to full
compliance with local, state, and federal laws and regulations.
The Company believes it is in compliance with Indonesian environmental
laws, rules, and regulations. The Company had a team of environmental
scientists from a leading Indonesian scientific institution conduct a study
to update its 1984 Environmental Impact Assessment that covered expansion
to 66,000 MTPD. Subsequently, that document was expanded by other
independent scientists to cover all environmental aspects of the current
expansion to 115,000 MTPD. The latest study document was submitted to the
Government in December 1993. Based on preliminary hearings, the Company
believes the study document will be accepted substantially as submitted.
The Company has made, and will continue to make, expenditures at its
operations for protection of the environment. Increasing emphasis on
environmental matters can be expected to require the Company to incur
additional costs, which will be charged against income from future
operations. On the basis of its analysis of its operations in relation to
current and presently anticipated environmental requirements, management
does not anticipate that these investments will have a significant adverse
impact on its future operations, liquidity, capital resources, or financial
position.
1992 RESULTS OF OPERATIONS COMPARED WITH 1991
FCX reported 1992 net income of $122.9 million ($.66 per share)
compared with 1991 net income of $96.2 million ($.53 per share).
A reconciliation of revenues from 1991 to 1992
is presented below (in millions):
Revenues - 1991 .............................................. $467.5
Price realizations:
Copper ..................................................... 8.8
Gold........................................................ (7.4)
Sales volumes:
Copper...................................................... 218.5
Gold ....................................................... 95.7
Treatment charges............................................. (73.0)
Adjustments to prior year concentrate sales................... 12.5
Other......................................................... (8.3)
------
Revenues - 1992 .............................................. $714.3
======
Revenues increased 53 percent in 1992, reflecting higher production
rates due to the mine/mill expansion, higher gold grades, and the sale of
all year-end 1991 inventory. Price realizations were relatively unchanged
between years (2 percent increase in copper realizations and 5 percent
decrease in gold realizations), but sales volumes benefited significantly
from the expansion, higher gold grades, and inventory sales discussed
above. Copper sales volumes increased 48 percent and gold sales volumes
increased 71 percent. Partially offsetting the benefit from sales volumes
increases was a 3.6 cents per pound increase in treatment charges because
of tight market conditions in the smelting industry early in 1992 and
increased spot market sales attributable to higher than anticipated
production due to the early completion of the 57,000 MTPD expansion
program. A $5.7 million upward revenue adjustment was made in 1992
compared with a $6.8 million downward revenue adjustment in 1991 for prior
year concentrate sales contractually priced during the year.
Cost of sales for 1992 were $357.2 million, an increase of 47 percent
from 1991 due primarily to the 48 percent increase in copper sales volumes.
Unit site production and delivery costs in 1992 approximated 1991 costs.
FCX's depreciation rate declined from an average 8.7 cents per recoverable
pound in 1991 to 7.4 cents in 1992 because of the significant increase in
ore reserves during 1991.
Interest expense was $18.9 million during 1992 compared with $21.5
million in 1991, excluding $24.0 million and $18.3 million of capitalized
interest, respectively.
The 1992 general and administrative expenses rose to $68.5 million
from $40.6 million in 1991, because of several financing transactions and
operational and environmental studies in 1992 which required additional
corporate personnel whose salaries and related overhead, were charged to
the Company. General and administrative expenses also increased because of
the additional personnel and facilities needed in Indonesia for the
expanding operations.
Minority interest share of net income reflects FCX's 80 percent
ownership interest in PT-FI for 1992, compared with its 90 percent interest
during 1991.
___________________________
The results of operations reported and summarized above are not necessarily
indicative of future operating results.
The information set forth under the caption "FCX Class A Common Shares"
and "Class A Common Share Dividends", on the inside back cover of FCX's 1993
Annual Report to stockholders, is incorporated herein by reference. As of
March 15, 1994, there were 2,355 record holders of FCX's Class A common stock.
Item 8. Financial Statements and Supplementary Data.
- -----------------------------------------------------
The financial statements of FCX, the notes thereto, the report of
management and the report thereon of Arthur Andersen & Co., appearing on pages
25 through 39, inclusive, of FCX's 1993 Annual Report to stockholders, are
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
- ----------------------------------------------------------------------------
and Financial Disclosure.
-------------------------
Not applicable.
PART III
--------
Items 10, 11, 12, and 13. Directors and Executive Officers of the Registrant,
- ------------------------------------------------------------------------------
Executive Compensation, Security Ownership of Certain Beneficial
--------------------------------------------------------------------
Owners and Management, and Certain Relationships and Related
-----------------------------------------------------------------
Transactions.
-------------
The information set forth under the captions "Voting Procedure" and
"Election of Directors", beginning on pages 1 and 5, respectively, of the
Proxy Statement dated March 31, 1994, submitted to the stockholders of FCX in
connection with its 1994 Annual Meeting to be held on May 5, 1994, is
incorporated herein by reference.
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
- --------------------------------------------------------------------------
(a)(1), (a)(2), and (d). Financial Statements. See Index to Financial
Statements appearing on page F-1 hereof.
(a)(3) and (c). Exhibits. See Exhibit Index beginning on page E-1
hereof.
(b). Reports on Form 8-K. No reports on Form 8-K were filed by the
registrant during the fourth quarter of 1993.
SIGNATURES
----------
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 29, 1994.
FREEPORT-McMoRan COPPER & GOLD INC.
BY: /s/ James R. Moffett
--------------------------------
James R. Moffett
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on March 29, 1994.
/s/ James R. Moffett Chairman of the Board and
- ------------------------------ Director
James R. Moffett
George A. Mealey* President, Chief Executive Officer
and Director
(Principal Executive Officer)
Stephen M. Jones* Vice President and
Chief Financial Officer
(Principal Financial Officer)
C. Donald Whitmire* Controller
(Principal Accounting Officer)
Leland 0. Erdahl* Director
Ronald Grossman* Director
Rene L. Latiolais* Director
Wolfgang F. Siegel* Director
Elwin E. Smith* Director
Eiji Umene* Director
*By: /s/ James R. Moffett
-------------------------------
James R. Moffett
Attorney-in-Fact
INDEX TO FINANCIAL STATEMENTS
------------------------------
The financial statements of FCX, the notes thereto, and the report
thereon of Arthur Andersen & Co. appearing on pages 25 through 39, inclusive,
of FCX's 1993 Annual Report to stockholders are incorporated by reference.
The financial statement schedules listed below should be read in
conjunction with such financial statements contained in FCX's 1993 Annual
Report to stockholders.
Page
----
Report of Independent Public Accountants........................ F-1
II-Amounts Receivable from Employees............................ F-2
III-Condensed Financial Information of Registrant............... F-3
V-Property, Plant and Equipment................................. F-6
VI-Accumulated Depreciation and Amortization.................... F-7
X-Supplementary Income Statement Information.................... F-8
Schedules other than those schedules listed above have been omitted since
they are either not required or not applicable or the required information is
included in the financial statements or notes thereof.
* * *
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
We have audited, in accordance with generally accepted auditing
standards, the financial statements as of December 31, 1993 and 1992 and
for each of the three years in the period ended December 31, 1993 included
in Freeport-McMoRan Copper & Gold Inc.'s annual report to shareholders
incorporated by reference in this Form 10-K, and have issued our report
thereon dated January 25, 1994. Our audits were made for the purpose of
forming an opinion on those statements taken as a whole. The schedules
listed in the index above are the responsibility of the Company's
management and are presented for purposes of complying with the Securities
and Exchange Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required
to be set forth therein in relation to the basic financial statements taken
as a whole.
Arthur Andersen & Co.
New Orleans, Louisiana
January 25, 1994
FREEPORT-McMoRan COPPER & GOLD INC.
SCHEDULE II - AMOUNTS RECEIVABLE FROM EMPLOYEES
for the years ended December 31, 1993, 1992 and 1991
<TABLE>
<CAPTION>
Balance at Balance at
Beginning Amounts End of Period
------------------- --------------
Employee of Period Additions Collected Written Current Long-
Off Term
- ------------------- ---------- --------- --------- --------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
1993:
- ----
Usman S. Pamuntjak $305,910 $ - $305,910 - $ - $ -
Hoediatmo Hoed 248,069 - 25,668 - 25,663 196,738
Adrianto Machribie 480,000 200,000 65,500 - 73,200 541,300
1992:
- ----
Usman S. Pamuntjak 339,900 - 33,990 - 33,990 271,920
Hoediatmo Hoed 271,425 256,625 279,981 - 25,663 222,406
Adrianto Machribie - 500,000 20,000 - 60,000 420,000
1991:
- ----
Usman S. Pamuntjak 339,900 - - - 33,990 305,910
Hoediatmo Hoed 291,625 - 20,200 - 22,400 249,025
<FN>
a. Under the (PT-FI) residential loan policy, Mr. Pamuntjak, President of
PT-FI until December 31, 1990, Mr. Hoed, President of PT-FI effective
January 1, 1991, and Mr. Machribie, Vice President of PT-FI, borrowed
$525,450, $360,000 and $700,000, respectively.
Mr. Pamuntjak retired from PT-FI on December 31, 1990 and on January 1,
1991 signed a consulting services agreement with PT-FI. For the
performance of his services under this agreement, PT-FI forgave, as
compensation, 10 percent of the indebtedness in 1992. The consulting
services agreement with Mr. Pamuntjak was terminated in January 1993, at
which time Mr. Pamuntjak repaid the balance of the loan.
Effective September 1992, Mr. Hoed executed a new loan in the amount
of $256,625 which was used to pay off the remaining balance of the
existing loan; 10 percent of the principal amount of the new loan will
be forgiven annually.
Effective August 1992, Mr. Machribie borrowed $500,000 consisting of
one loan for $400,000 (First Loan) and a second loan for $100,000
(Second Loan). As long as Mr. Machribie remains in the employ of PT-
FI, 10 percent of the principal amount of the First Loan and 20
percent of the principal amount of the Second Loan will be forgiven
annually; a pro rata amount of $20,000 was forgiven in 1992.
Additionally, effective July 6, 1993, Mr. Machribie borrowed
$200,000. This loan will be repaid over 15 years through monthly
salary deductions in the amount of $1,100, which began in August 1993.
</TABLE>
FREEPORT-McMoRan COPPER & GOLD INC.
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Balance Sheets
December 31,
----------------------------
1993 1992
---------- --------
(In Thousands)
ASSETS
Cash and short-term investments $ 427 $174,760
Interest receivable 7,582 1,739
Receivable from Government of Indonesia 2,247 8,535
Notes receivable-PT-FI 1,064,888 458,274
Investment in PT-FI 145,959 106,169
Investment in PTII 75,601 74,401
Investment in RTM 43,254 -
Other Assets 2,011 115
---------- --------
Total assets $1,341,969 $823,993
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable & accrued liabilities $ 32,468 $ 3,953
Zero coupon exchangeable notes 102,039 173,583
Amount due to FTX 12,270 -
RTM stock subscription payable 12,644 -
Other liabilities and deferred credits 2,001 -
Mandatory Redeemable Gold-Denominated
Preferred Stock 232,620 -
Stockholders' equity 947,927 646,457
------- --------
Total liabilities and stockholders' equity $1,341,969 $823,993
========== ========
Statements of Income
Years Ended December 31,
-------------------------------------
1993 1992 1991
-------- --------- --------
(In Thousands)
Income from investment in
PT-FI and PTII, net of
PT-FI tax provision $ 53,861 $128,220 $100,472
Net loss from investment in RTM (15,666) - -
Elimination of intercompany profit (6,610) - -
General and administrative expenses (5,207) (4,802) (3,280)
Depreciation and amortization (2,397) (200) (1,134)
Interest expense (8,017) (16,518) (8,767)
Interest income on PT-FI notes receivable:
Zero coupon exchangeable notes 19,175 18,326 8,767
Promissory notes 9,292 11,097 -
8.235% convertible 14,036 - -
Step-up perpetual convertible 12,785 - -
Gold production payment loan 4,055 - -
Other income (expense), net (406) 5,561 101
Provision for income taxes (24,085) (11,791) -
------- -------- --------
Net income 50,816 129,893 96,159
Preferred dividends (28,954) (7,025) -
------- -------- --------
21,862 $122,868 $ 96,159
======= ======== ========
FREEPORT-McMoRan COPPER & GOLD INC.
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
(Continued)
Statements of Cash Flow
Years Ended December 31,
-----------------------------
1993 1992 1991
-------- -------- --------
(In Thousands)
Cash flow from operating activities:
Net income $ 50,816 $129,893 $ 96,159
Adjustments to reconcile net
income to net cash
provided by operating activities:
Income from investment in
PT-FI and PTII (53,861) (128,220) (100,472)
Net loss from investment in RTM 15,666 - -
Elimination of intercompany profit 6,610 - -
Dividends received from PT-FI 132,048 78,214 126,330
Accretion of note receivable -
PT-FI, net (9,104) (1,808) -
Depreciation and amortization 2,397 200 1,134
(Increase) decrease in accounts
receivable - 20,000 (20,000)
Increase (decrease) in accounts payable (646) 597 (18)
Other (5,959) (1,854) -
-------- -------- --------
Net cash provided by operating
activities 137,967 97,022 103,133
-------- -------- --------
Cash flow from investing activities:
Received from Government of Indonesia 6,288 3,911 5,615
Investment in RTM (43,642) - -
Investment in PTII - (211,892) -
Investment in Freeport Hasa Inc. - (1) -
-------- -------- --------
Net cash provided by (used in)
investing activities (37,354) (207,982) 5,615
-------- -------- --------
Cash flow from financing activities:
Cash dividends paid:
Class A common stock (33,298) (26,088) (22,000)
Class B common stock (85,277) (85,277) (78,171)
Special preference stock (15,708) (4,407) -
Step-Up preferred stock (5,590) - -
Gold-denominated preferred stock (1,683) - -
Net proceeds from issuance of zero
coupon notes - - 218,560
Proceeds from Class A common stock offering - 174,142 -
Proceeds from Depositary shares offerings 561,090 217,867 -
Proceeds from sale of stock to Bakrie - 212,484 -
Proceeds from FTX 20,650 - -
Repayment to FTX (8,380) - -
Loans to PT-FI (706,750) (212,484) (218,560)
-------- -------- --------
Net cash provided by (used) in
financing activities (274,946) 276,237 (100,171)
-------- -------- --------
Net increase (decrease) in cash and
short-term investments (174,333) 165,277 8,577
Cash and short-term investments at
beginning of year 174,760 9,483 906
-------- -------- --------
Cash and short-term investments
at end of year $ 427 $174,760 $ 9,483
======== ======== ========
Interest paid $ 213 $ - $ -
======== ======== ========
Taxes paid $ 22,723 $ 11,762 $ -
======== ======== ========
a. The footnotes contained in FCX's 1993 Annual Report to stockholders are
an integral part of these statements.
b. Effective December 31, 1991, PT-FI issued 21,300 of its shares,
representing a 10 percent interest in PT-FI, to a publicly traded entity
owned by Indonesian investors for $212.5 million, pursuant to an
agreement negotiated in early 1991. FCX guaranteed the buyer's
financing for this purchase and accordingly, deferred the gain on the
sale.
In December 1992, FCX purchased approximately 49 percent of the capital
stock of P.T. Indocopper Investama Corporation (PTII), a publicly
traded Indonesian entity which owned 10 percent of the outstanding
common stock of PT-FI. PTII acquired the 10 percent of the outstanding
common stock of PT-FI from the Indonesian investors who acquired the
shares on December 31, 1991. When FCX recorded its investment in PTII
it utilized purchase accounting and thus eliminated the deferred gain of
$138.6 million on the original sale to the Indonesian investors against
the cost of the 4.9 percent indirect interest in PT-FI. The excess cost
resulting from the purchase ($69.5 million) is reflected in FCX's
consolidated balance sheet as property, plant and equipment and is being
amortized over the remaining life of the Contract of Work (approximately
28 years), at a rate of approximately $2.4 million per year. This
property, plant and equipment is included in the condensed balance sheet
as part of FCX's investment in PTII.
FREEPORT-McMoRan COPPER & GOLD INC.
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
for the years ended December 31, 1993, 1992, and 1991
Col. A Col. B Col. C Col. D Col. E Col. F
- --------------------- ------------ --------- ----------- --------- ----------
Balance at Balance at
Beginning of Additions Retirements Other-Add End of
Description Period at Cost and Sales (Deduct) Period
- --------------------- ------------ --------- ----------- --------- ---------
(In Thousands)
1993:
- ----
Exploration and
development costs $ 137,576 $ 9,365 $ - $ - $ 146,941
Plant and equipment 1,306,363 751,131 (2,882) (29,331) 2,025,281
---------- -------- ------- --------- ----------
$1,443,939 $760,496 $(2,882) $ (29,331) $2,172,222
========== ======== ======= ========= ==========
1992:
- ----
Exploration and
development costs $ 135,548 $ 2,028 $ - $ - $ 137,576
Plant and equipment 876,481 365,820 (5,445) 69,507 (a) 1,306,363
---------- -------- ------- --------- ----------
$1,012,029 $367,848 $(5,445) $ 69,507 $1,443,939
========== ======== ======= ========= ==========
1991:
- ----
Exploration and
development costs $ 129,138 $ 6,410 $ - $ - $ 135,548
Plant and equipment 748,851 233,544 (3,729) (102,185)(a) 876,481
---------- -------- ------- --------- ----------
$ 877,989 $239,954 $(3,729) $(102,185) $1,012,029
========== ======== ======= ========= ==========
a. See note (b) on Schedule III.
FREEPORT-McMoRan COPPER & GOLD INC.
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
for the years ended December 31, 1993, 1992, and 1991
Col. A Col. B Col. C Col. D Col. E Col. F
- ------------------------- ----------- ----------- ---------- --------- -------
Balance at Additions Balance
Beginning Charged to Retire- at
of Costs and ments Other-Add End of
Description Period Expenses(a) and Sales (Deduct) Period
- ------------------------- ----------- ----------- --------- --------- ------
(In Thousands)
1993: Accumulated
- ----
depreciation
and amortization $450,527 $67,906 $(2,732) $ 9,918 $525,619
======== ======= ======= ======= ========
1992: Accumulated
- ----
depreciation
and amortization $410,354 $48,272 $(5,438) $(2,661) $450,527
======== ======= ======= ======= ========
1991: Accumulated
- ----
depreciation
and amortization $375,818 $38,397 $(3,729) $ (132) $410,354
======== ======= ======= ======= ========
a. Mine and mill assets, including estimated future capital costs, are
depreciated on the unit-of-production method while the remaining assets
are depreciated on a straight-line basis.
FREEPORT-McMoRan COPPER & GOLD INC.
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
for the years ended December 31, 1993, 1992, and 1991
Col. A Col. B
- -------------------------------------- ------------------------------------
Description Charged to Costs and Expenses
- -------------------------------------- ------------------------------------
1993 1992 1991
------- ------- -------
(In Thousands)
Maintenance and repairs $78,335 $68,623 $52,061
======= ------- -------
Taxes, other than payroll and
income taxes:
Value added tax $ 4,164 $ 792 $ 1,371
Shippers tax - - (12)
Fiscal 259 263 60
P.I.U.D. 3,050 3,148 2,716
------- ------- -------
$ 7,473 $ 4,203 $ 4,135
======= ======= =======
Royalties $ 9,539 $15,708 $10,355
======= ======= =======
Freeport-McMoRan Copper & Gold Inc.
Exhibit Index
Sequentially
Exhibit Numbered
Number Page
------ ------------
3.1 Composite copy of the Certificate of
Incorporation of FCX.
3.2 By-Laws of FCX, as amended.
Incorporated by reference to Exhibit
3.2 to the Annual Report on Form 10-K
of FCX for the fiscal year ended
December 31, 1992 (the "FCX 1992 Form
10-K").
4.1 Certificate of Designations of the 7%
Convertible Exchangeable Special
Preference Stock (the "Special
Preference Stock") of FCX.
Incorporated by reference to Exhibit
5 to the Form 8 Amendment No. 1 dated
July 16, 1992 (the "Form 8
Amendment") to the Application for
Registration on Form 8-A of FCX dated
July 2, 1992.
4.2 Deposit Agreement dated as of July
21, 1992 among FCX, Mellon Securities
Trust Company, as Depositary, and
holders of depositary receipts
("Depositary Receipts") evidencing
certain Depositary Shares, each of
which, in turn, represents 2-16/17
shares of Special Preference Stock.
Incorporated by reference to Exhibit
2 to the Form 8 Amendment.
4.3 Form of Depositary Receipt.
Incorporated by reference to Exhibit
1 to the Form 8 Amendment.
4.4 Certificate of Designations of the
Step-Up Convertible Preferred Stock
(the "Step-Up Convertible Preferred
Stock") of FCX.
4.5 Deposit Agreement dated as of July 1,
1993 among FCX, Mellon Securities
Trust Company, as Depositary, and
holders of depositary receipts
("Step-Up Depositary Receipts")
evidencing certain Depositary Shares,
each of which, in turn, represents
0.05 shares of Step-Up Convertible
Preferred Stock.
4.6 Form of Step-Up Depositary Receipt.
4.7 Certificate of Designations of the
Gold-Denominated Preferred Stock (the
"Gold-Denominated Preferred Stock")
of FCX.
4.8 Deposit Agreement dated as of August
12, 1993 among FCX, Mellon Securities
Trust Company, as Depositary, and
holders of depositary receipts
("Gold-Denominated Depositary
Receipts") evidencing certain
Depositary shares, each of which, in
turn, represents 0.05 shares of Gold
Denominated Preferred Stock.
4.9 Form of Gold-Denominated Depositary
Receipt.
4.10 Credit Agreement dated as of June 1,
1993 (the "PT-FI Credit Agreement")
among PT-FI, the several banks which
are parties thereto (the "PT-FI
Banks"), Morgan Guaranty Trust
Company of New York, as PT-FI Trustee
(the "PT-FI Trustee"), and Chemical
Bank, as agent (the "PT-FI Bank
Agent").
4.11 First Amendment dated as of February
2, 1994 to the PT-FI Credit Agreement
among PT-FI, the PT-FI Banks, the PT-
FI Trustee and the PT-FI Bank Agent.
4.12 Second Amendment dated as of March 1,
1994 to the PT-FI Credit Agreement
among PT-FI, the PT-FI Banks, the PT-
FI Trustee and the PT-FI Bank Agent.
4.13 Agreement dated as of May 1, 1988
between Freeport Minerals Company and
FCX assigning certain stockholder
rights and obligations. Incorporated
by reference to Exhibit 10.13 to
Registration No. 33-20807.
10.1 Design, Engineering and Related
Services Contract dated as of
September 15, 1992 between PT-FI and
Fluor Daniel Engineers &
Constructors, Ltd. Incorporated by
reference to Exhibit 10.1 to the FCX
1992 Form 10-K.
10.2 Site Services Contract dated as of
September 15, 1992 between PT-FI and
Fluor Daniel Eastern, Inc.
Incorporated by reference to Exhibit
10.2 to the FCX 1992 Form 10-K.
10.3 Contract of Work dated December 30,
1991 between The Government of the
Republic of Indonesia and PT-FI.
Incorporated by reference to Exhibit
10.20 to the FCX 1991 Form 10-K.
10.4 Management Services Agreement dated
as of May 1, 1988 among FCX, FII and
FTX. Incorporated by reference to
Exhibit 10.01 to Registration No. 33-
20807.
10.5 Concentrate Sales Agreement dated as
of December 30, 1990 between FII and
Dowa Mining Co., Ltd., Furukawa Co.,
Ltd., Mitsubishi Materials
Corporation, Mitsui Mining & Smelting
Co., Ltd., Nittetsu Mining Co., Ltd.,
Nippon Mining Co., Ltd. and Sumitomo
Metal Mining Co., Ltd. (Confidential
information omitted and filed
separately with the Securities and
Exchange Commission.) Incorporated
by reference to Exhibit 10.3 to the
Annual Report on Form 10-K of FCX for
the fiscal year ended December 31,
1990.
12.1 FCX Computation of Ratio of Earnings
to Fixed Charges.
13.1 Those portions of the 1993 Annual
Report to stockholders of FCX which
are incorporated herein by reference.
18.1 Letter from Arthur Andersen & Co.
concerning changes in accounting
principles.
21.1 Subsidiaries of FCX.
23.1 Consent of Arthur Andersen & Co.
dated March 25, 1994.
24.1 Certified resolution of the Board of
Directors of FCX authorizing this
report to be signed on behalf of any
officer or director pursuant to a
Power of Attorney.
24.2 Powers of Attorney pursuant to which
this report has been signed on behalf
of certain officers and directors of
FCX.
Exhibit 3.1
COMPOSITE COPY
OF THE
CERTIFICATE OF INCORPORATION
OF
FREEPORT-McMoRan COPPER & GOLD INC.
FIRST: The name of the corporation is FREEPORT-McMoRan COPPER
& GOLD INC.
SECOND: The address of the registered office of
the corporation in the State of Delaware is 1209
Orange Street, in the City of Wilmington, County of
New Castle, and the name of its registered agent at
such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes
to be conducted or promoted are:
1. To enter into, maintain, operate and carry
on the business of mining in all its branches in the
United States of America and in any other part of the
world, and to quarry, mine, pump, extract, remove and
otherwise produce, and to grind, treat, concentrate,
smelt, refine, dress and otherwise prepare, produce,
buy, sell and in every way deal in and with minerals,
ores, concentrates and other mineral and chemical
substances of all kinds, metallic and nonmetallic,
including, but without in any way limiting the
generality of the foregoing, antimony, barite,
chromium, coal, cobalt, copper, gas, gold, iron,
lead, molybdenum, nickel, oil, potash, salt, silica,
sand, silver, sulphur, tantalum, tin, titanium,
tungsten, uranium, zinc and ores and concentrates
thereof.
2. To purchase, locate, denounce, lease or
otherwise acquire, take, hold and own, and to assign,
transfer, lease, exchange, mortgage, pledge, sell or
otherwise dispose of and in any manner deal with and
contract with reference to, mines, wells, mining
claims, mining rights, mineral lands, mineral leases,
mineral rights, royalty rights, water rights, timber
lands, timber and timber rights, and real and
personal property of every kind, and any interest
therein, in the United States of America or in any
other country, to prospect, explore, work, exercise,
develop, manage, operate and turn the same to
account, and to engage in mining, geological,
economic, feasibility, development, and other studies
in the United States of America or in any other
country.
3. To make, manufacture, treat, process,
produce, buy, sell and in every way deal in and with
minerals, ores, concentrates and chemicals of every
description, organic or inorganic, natural or
synthetic, in the form of raw materials, intermediate
or finished products and any other related products
and substances whatsoever related thereto or of a
like or similar nature or which may enter into the
manufacture of any of the foregoing or be used in
connection therewith, and derivatives and by-products
derived from the manufacture thereof and products to
be made therefrom and generally without limitation by
reference of the foregoing, all other products and
substances of every kind, character and description.
4. To engage in any lawful act or activity,
whether or not related to the foregoing, for which
corporations may be organized under the General
Corporation Law of Delaware.
FOURTH:
I. The total number of shares of all classes of
capital stock that the corporation shall have
authority to issue is 312,000,000 shares, with a par
value of $0.10 per share. Of such shares,
110,000,000 shares shall consist of Special Stock,
200,000,000 shares shall consist of Class B Common
Stock and 2,000,000 shares shall consist of Preferred
Stock.
II. Special Stock.
A. Class A Common Stock
Within the limits of the authorized
Special Stock, the Corporation shall
have authority to designate shares
of Special Stock as shares of Class
A Common Stock, the terms of which
are as follows:
(1) Dividends. (a) Until and
including May 1, 1993 (the
"Preferential Period"), the holders
of shares of Class A Common Stock
will be entitled to receive
cumulative cash dividends (the
"Cumulative Dividend") when, as and
if declared by the Board of
Directors of the corporation,
payable quarterly on the first day
of each February, May, August and
November, at an annual rate equal to
$0.205 per share for periods
commencing August 1, 1992; provided,
if the corporation shall subdivide
or split by dividend or otherwise
the issued shares of Class A Common
Stock into a larger number of shares
or combine the issued shares of
Class A Common Stock into a smaller
number of shares, such annual rate
shall be adjusted by multiplying
such annual rate by a fraction, the
numerator of which shall be the
number of shares of Class A Common
Stock that are issued and
outstanding prior to such
subdivision, split or combination
and the denominator of which shall
be the total number of shares of
Class A Common Stock that are issued
and outstanding following such
subdivision, split or combination;
provided further, that the Board of
Directors may, at any time during
the Preferential Period, at its sole
discretion, increase the amount of
the Cumulative Dividend to which
holders of Class A Common Stock will
be entitled. During the
Preferential Period, Cumulative
Dividends on the Class A Common
Stock will accrue and be cumulative
from the date of its original issue
and will be payable to the holder of
record on such respective record
dates as may be fixed by the Board
of Directors in advance of the
payment of each Cumulative Dividend.
(b) Unless full Cumulative
Dividends on all outstanding shares
of Class A Common Stock for all past
quarterly dividend periods in the
Preferential Period and for the
current quarterly dividend period
(if during the Preferential Period)
have been paid, or declared and set
apart for payment, (i) the
corporation may not 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 B Common Stock or any
other stock of the corporation
ranking junior to the Class A Common
Stock as to dividends or
distribution of assets upon
liquidation, dissolution or winding
up of the affairs of the corporation
(the Class B Common Stock and such
other stock being referred to
hereinafter as "Junior Stock") other
than a dividend payable solely in
Junior Stock, (ii) neither the
corporation nor any subsidiary of
the corporation may purchase, redeem
or otherwise acquire for value any
shares of Junior Stock, directly or
indirectly, other than as a result
of a reclassification of Junior
Stock, or the 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, and (iii)
neither the corporation nor any
subsidiary of the corporation may
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.
If the funds available for the
payment of dividends are
insufficient to pay in full the
Cumulative Dividends payable on all
outstanding shares of Class A Common
Stock and any other series or class
of capital stock ranking on a parity
as to dividends with the Class A
Common Stock, the total available
funds to be paid in partial
dividends on the Class A Common
Stock and such other series or class
shall be divided among the Class A
Common Stock and such other series
or class in proportion to the
aggregate amount of dividends
accrued and unpaid with respect to
the Class A Common Stock and such
other series or class. Accruals of
Cumulative Dividends will not bear
interest.
(c) After full Cumulative Dividends
on all outstanding shares of Class A
Common Stock for all past quarterly
dividend periods in the Preferential
Period and the current quarterly
dividend period (if during the
Preferential Period) and full
preferential dividends on all
outstanding shares of any other
series of Special Stock ranking
senior in priority as to payment of
such preferential dividends to the
Class B Common Stock have been paid,
or declared and set apart for
payment, the corporation may declare
dividends on the Class B Common
Stock for such quarter in an amount
per share up to the per share
Cumulative Dividend for such current
quarter on the Class A Common Stock.
No additional dividends may be
declared or paid in such quarter on
the Class B Common Stock unless an
equal additional amount per share
shall be declared or paid on the
Class A Common Stock and any other
series of Special Stock entitled to
participate therein.
(d) After May 1, 1993, and after
full Cumulative Dividends on all
outstanding shares of Class A Common
Stock for all past quarterly
dividend periods in the Preferential
Period have been paid, or declared
and set apart for payment, the Class
A Common Stock and the Class B
Common Stock shall be treated for
all purposes as though they were of
the same class. Prior to such time,
the corporation may not split or
reclassify the Class B Common Stock
or pay a dividend in Class B Common
Stock on the Class B Common Stock,
unless it similarly splits or
reclassifies the Class A Common
Stock or pays a similar dividend in
Class A Common Stock on the Class A
Common Stock.
(2) Liquidation Rights. Until May
1, 1993, in the event of any
voluntary or involuntary
liquidation, dissolution or winding
up of the corporation or P.T.
Freeport Indonesia Company ("PT-
FI"), after payment or provision for
payment of the debts and other
liabilities of the Corporation or
PT-FI, the holders of Class A Common
Stock will be entitled to receive in
cash out of the remaining net assets
of the corporation an amount per
share initially equal to $2.1875
reduced by 1.25 per cent on each
quarterly dividend payment date
commencing August 1, 1988, plus
accrued and unpaid dividends, before
any distribution is made or set
apart for the holders of Junior
Stock; provided, if the corporation
shall subdivide or split by dividend
or otherwise the issued shares of
Class A Common Stock into a larger
number of shares or combine the
issued shares of Class A Common
Stock into a smaller number of
shares, such amount per share as in
effect at the time of such
subdivision, split or combination
shall be adjusted by multiplying
such amount per share by a fraction,
the numerator of which shall be the
number of shares of Class A Common
Stock that are issued and
outstanding prior to such
subdivision, split or combination
and the denominator of which shall
be the total number of shares of
Class A Common Stock that are issued
and outstanding following such
subdivision, split or combination.
If the amounts payable with respect
to the Class A Common Stock are not
paid in full, the holders of the
Class A Common Stock and any stock
of the corporation on a parity with
Class A Common Stock as to
distribution of assets in the event
of any voluntary or involuntary
liquidation, dissolution or winding
up of the corporation will have the
right to share ratably in any
distribution of the remaining assets
of the corporation in proportion to
the full respective preferential
amounts to which they are entitled.
After payment of the full amount of
the liquidating distribution to
which the holders of the Class A
Common Stock are entitled, the
holders of shares of Class B Common
Stock will be entitled to
participate in any distribution of
the remaining assets by the
corporation up to an amount per
share equal to the per share
liquidating distribution (excluding
any amounts received with respect to
accrued and unpaid preferential
dividends) received by the holders
of the Class A Common Stock, subject
to the rights of the holders of any
other class or series of the
corporation's capital stock.
Thereafter, the holders of the Class
A Common Stock and the holders of
the Class B Common Stock shall be
entitled to participate in any
distribution of the remaining assets
on an equal per share basis, subject
to the rights of the holders of any
other class or series of the
corporation's capital stock. A
consolidation or merger of the
corporation or PT-FI with one or
more corporations other than
Freeport-McMoRan Inc. or any of its
subsidiaries of affiliates (the "FTX
Group") or the sale of all or
substantially all of the assets of
the corporation or PT-FI outside the
FTX Group will be deemed to be a
liquidation, dissolution or winding
up of the corporation or PT-FI. In
the event of any nationalization or
expropriation of PT-FI's rights
under its current Contract of Work
with the Government of Indonesia or
all or substantially all of the
operating assets of PT-FI prior to
May 1, 1993, the corporation will
effect a liquidation or dissolution
in a manner designed to maximize the
remaining assets of the corporation
available for distribution. The
Class A Common Stock will have a
similar preferential right in the
event of any such voluntary or
involuntary liquidation, dissolution
or winding up of the corporation or
PT-FI after May 1, 1993 to the
extent, but only to the extent, of
any accrued and unpaid cumulative
dividends applicable to the
Preferential Period.
(3) At all times during the
Preferential Period, there shall
remain outstanding shares of Class B
Common Stock in an amount equal to
not less than sixty percent of the
total of all shares of Class A
Common Stock, other Special Stock
and Class B Common Stock then issued
and outstanding.
(4) No Preferred Stock may be
issued during the Preferential
Period.
B. Additional Shares of Special Stock
The Board of Directors is expressly
authorized to adopt, from time to
time, a resolution or resolutions
providing for the issuance of the
remaining 70,000,000 shares of
Special Stock in one or more series,
to fix the number of shares in each
such series (subject to the
aggregate limitations thereon in
this Article), and to fix the
designations, powers, preferences
and rights and the qualifications,
limitations and restrictions of
each such series. Within the limits
of the authorized Special Stock, the
corporation will be authorized to
issue additional shares of Class A
Common Stock and shares of
additional Special Stock (including
stock having preferential rights
which are similar to those of Class
A Common Stock but which extend
beyond the Preferential Period,
providing that during the
Preferential Period such rights do
not permit the payment of
preferential dividends per share in
excess of the preferential rights of
the Class A Common Stock), including
the issuance in exchange for shares
of Class B Common Stock of such
shares for sale to the public. The
authority of the Board of Directors
with respect to each series shall
include, but not be limited to,
determination of the following
(which may vary as between the
different series of Special Stock):
(a) The number of shares
constituting the shares of the
series and the distinctive
designation of the series;
(b) The dividend rate of the shares
of the series and the extent, if
any, to which dividends thereon
shall be cumulative;
(c) Whether shares of the series
shall be redeemable and, if
redeemable, the redemption price
payable on redemption thereof, which
price may, but need not, vary
according to the time or
circumstances of such redemption;
(d) The amount or amounts payable
upon the shares of the series in the
event of voluntary or involuntary
liquidation, dissolution or winding
up of the corporation prior to any
payment or distribution of the
assets of the corporation to any
class or classes of stock of the
corporation ranking junior to the
Special Stock;
(e) Whether the shares of the
series shall be entitled to the
benefit of a sinking or retirement
fund to be applied to the purchase
or redemption of shares of the
series and, if so entitled, the
amount of such fund and the manner
of its application, including the
price or prices at which the shares
may be redeemed or purchased through
the application of such fund;
(f) Whether the shares of the
series shall be convertible into, or
exchangeable for, shares of any
other class or classes or of any
other series of the same or any
other class or classes of stock of
the corporation, and, if so
convertible or exchangeable, the
conversion price or prices, or the
rates of exchange, and the
adjustment thereof, if any, at which
such conversion or exchange may be
made, and any other terms and
conditions of such conversion or
exchange;
(g) The extent, if any, to which
the holders of shares of the series
shall be entitled to vote on any
questions or in any proceedings or
to be represented at and to receive
notice of any meeting of
stockholders of the corporation;
(h) Whether, and the extent to
which, any of the voting powers,
designations, preferences, rights,
qualifications, limitations or
restrictions of any such series may
be made dependent upon facts
ascertainable outside of this
Certificate of Incorporation or of
any amendment hereto or outside the
resolution or resolutions providing
for the issuance of such series
adopted by the Board of Directors,
provided that the manner in which
such facts shall operate upon the
voting powers, designations,
preferences, rights, qualifications,
limitations or restrictions of such
series is clearly and expressly set
forth in the resolution or
resolutions providing for the
issuance of such series adopted by
the Board of Directors; and
(i) Any other preferences,
privileges or powers and any
relative, participating, optional or
other special rights and
qualifications, limitations or
restrictions of such series, as the
Board of Directors may deem
advisable, which shall not affect
adversely any other class or series
of Special Stock at the time
outstanding and which shall not be
inconsistent with the provisions of
this Certificate of Incorporation.
III. (a) Except as described in
Paragraph II above, the
holders of outstanding
shares of Special Stock,
including Class A Common
Stock, and Class B Common
Stock are entitled to
receive dividends out of
assets legally available
therefor at such times and
such equal per share
amounts as the Board of
Directors may from time to
time determine and upon
liquidation, dissolution or
winding up of the
corporation, the holders of
Special Stock, including
Class A Common Stock, and
Class B Common Stock are
entitled to receive on an
equal per share basis the
assets of the corporation
which are legally available
for distribution, after
payment of all debts and
other liabilities of the
corporation, except as
otherwise provided by the
Board of Directors,
pursuant to clause (B)(d)
of Paragraph II above, with
respect to any series of
Special Stock other than
the Class A Common Stock.
The shares of Special
Stock, including Class A
Common Stock, and Class B
Common Stock are neither
redeemable nor convertible,
and the holders thereof
have no preemptive or
subscription rights to
purchase any securities of
the corporation, except as
otherwise provided by the
Board of Directors,
pursuant to clauses (B)(c)
and (B)(f) of Paragraph II
above, with respect to any
series of Special Stock
other than the Class A
Common Stock.
(b) Each outstanding share of
Special Stock, including Class A
Common Stock, and Class B Common
Stock is entitled to one vote on all
matters submitted to a vote of
stockholders, except as otherwise
provided by the Board of Directors,
pursuant to clause (B)(g) of
Paragraph II above, with respect to
any series of Special Stock other
than the Class A Common Stock.
There is no cumulative voting. The
Special Stock entitled to vote,
including Class A Common Stock, and
the Class B Common Stock shall vote
as a single class, except that,
during the Preferential Period, the
holders of the Class A Common Stock
shall be entitled to vote as a
separate class upon any proposed
amendment to this Certificate of
Incorporation or any merger
transaction or recapitalization if
as a result the aggregate number of
authorized shares of Special Stock,
including Class A Common Stock,
would increase beyond 110,000,000
shares or the par value of the Class
A Common Stock would increase or
decrease or the powers, preferences
or special rights of the Class A
Common Stock would be altered or
changed so as to affect the holders
thereof adversely.
IV. Preferred Stock.
The Preferred Stock may be divided into
and issued in series. The Board of
Directors is hereby expressly
authorized, at any time or from time to
time, to divide any or all of the shares
of the Preferred Stock into series, and
in the resolution or resolutions
establishing a particular series, before
issuance of any of the shares thereof,
to fix and determine the powers,
designations, preferences and relative,
participating, optional or other rights,
and any qualifications, limitations or
restrictions, of the series so
established, to the fullest extent now
or hereafter permitted by the laws of
the State of Delaware, including, but
not limited to, the variations between
different series in the following
respects:
(a) The distinctive serial
designation of such series;
(b) The annual dividend rate
for such series; and the
date or dates from which
dividends shall commence to
accrue;
(c) The redemption price or
prices, if any, for shares
of such series and the
terms and conditions on
which such shares may be
redeemed;
(d) The sinking fund
provisions, if any, for the
redemption or purchase of
shares of such series;
(e) The preferential amount or
amounts payable upon shares
of such series in the event
of the voluntary or
involuntary liquidation of
the corporation;
(f) The voting rights of shares
of such series;
(g) The terms and conditions,
if any, upon which shares
of such series may be
converted and the class or
classes or series of shares
of the corporation into
which such shares may be
converted; and
(h) Such other terms,
limitations and relative
rights and preferences, if
any, of shares of such
series as the Board of
Directors may, at the time
of such resolutions,
lawfully fix and determine
under the laws of the State
of Delaware.
All shares of the Preferred Stock shall
be of equal rank with each other,
regardless of series.
FIFTH: The name and mailing address of the
incorporator is:
NAME MAILING ADDRESS
_____ ________________
R. Blain Andrus 6110 Plumas Street
Reno, Nevada 89509
SIXTH: The names and mailing addresses of the
persons who are to serve as directors until the first
annual meeting of stockholders or until their
successors are elected and qualify are as follows:
NAME MAILING ADDRESS
____ _______________
Milton H. Ward 1615 Poydras Street
New Orleans, LA 70112
Joseph W. Murray Mountain City Star Route
Elko, NV 89801
Richard Block Mountain City Star Route
Elko, NV 89801
SEVENTH: In furtherance, and not in limitation,
of the powers conferred by statute, (a) the Board of
Directors is expressly authorized to adopt, amend or
repeal the by-laws of the corporation in any manner
not inconsistent with the laws of the State of
Delaware or the certificate of incorporation of the
corporation, subject to the power of the stockholders
to adopt, amend or repeal the by-laws or to limit or
restrict the power of the Board of Directors to adopt,
amend or repeal the by-laws, and (b) the corporation
may in its by-laws confer powers and authorities upon
its Board of Directors in addition to those conferred
upon it by statute.
EIGHTH: Election of directors need not be by
ballot unless the by-laws of the corporation shall so
provide.
NINTH: (a) A director of this Corporation
shall not be liable to the Corporation or its
stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve
intentional misconduct or a knowing violation of the
law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from
which the director derived an improper personal
benefit.
(b) The Corporation shall indemnify any person
who is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the
request of the Corporation as a director, officer,
employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, to the
fullest extent permitted by applicable law. The
determination as to whether such person has met the
standard required for indemnification shall be made in
accordance with applicable law.
Expenses incurred by such a director, officer,
employee or agent in defending a civil or criminal
action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such person to repay
such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the
Corporation as authorized in this Article NINTH.
(c) The provisions of this Article NINTH shall be
deemed to be a contract between the corporation and
each person who serves as such director, officer,
employee or agent of the corporation in any capacity
at any time while this Article NINTH is in effect. No
repeal or modification of the foregoing provisions of
this Article NINTH nor, to the fullest extent
permitted by law, any modification of law shall
adversely affect any right or protection of a
director, officer, employee or agent of the
corporation existing at the time of such repeal or
modification.
The foregoing indemnification shall not be deemed
exclusive of any other rights to which those seeking
indemnification may be entitled under any applicable
law, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
TENTH: The corporation reserves the right to
amend, alter, change or repeal any provision contained
in this certificate of incorporation, in the manner
now or hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted subject
to this reservation.
Exhibit 4.4
CERTIFICATE OF DESIGNATIONS
OF
STEP-UP CONVERTIBLE PREFERRED STOCK
(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 no shares are currently 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 Consent dated
June 24, 1993, and a Special Committee thereof, pursuant
to authority specifically granted to it by such Board of
Directors, acting by Unanimous Written Consent dated June
29, 1993, duly adopted the following
resolutions authorizing the creation and issuance of a
series of Preferred Stock to be known as "Step-up
Convertible Preferred Stock."
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) 700,000 shares of
Preferred Stock of the Corporation are hereby constituted
as a series of Preferred Stock designated as "Step-Up
Convertible Preferred Stock" (hereinafter called "this
Series"). Each share of this Series shall be identical in
all respects with the other shares of this Series except
as to the dates from and after which dividends thereon
shall be cumulative. 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
converted into Class A Common Stock of the Corporation
("Class A Common Stock"), redeemed for cash, Class A
Common Stock or a combination thereof, or purchased by the
Corporation shall be cancelled, 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 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 November 1, 1993 (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. 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, 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, 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, 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.
(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. The Dividend Rate on the
shares of this Series for the period from the date of
original issue thereof to and including August 1, 1996,
shall be $25.00 per annum per share and for each Dividend
Period thereafter shall be $35.00 per annum per share.
Dividends in respect of the first Dividend Period shall
accrue from the date of original issuance. The term
"Dividend Period", as used herein, means (i), with respect
to the November 1, 1993 Dividend Payment Date, the period
from the date of original issuance of 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 not be redeemable prior to August 1, 1996. On and
after that date, the Corporation may, at its option,
redeem the shares of this Series, in whole or in part, at
any time or from time to time, as set forth herein,
subject to the provisions described below.
(b)(i) The shares of this Series may be redeemed
for Class A Common Stock, at the option of the
Corporation, at any time on or after August 1, 1996 and
prior to August 1, 1999 only if, for 20 Trading Days
within any period of 30 consecutive Trading Days,
including the last Trading Day of such period, the Current
Market Price of the Class A Common Stock on each of such
20 Trading Days exceeds 125% of the Conversion Price in
effect on such Trading Day. In order to exercise this
redemption option, the Corporation must issue a press
release announcing the redemption (the "Press Release")
prior to the opening of business on the third Trading Day
after the condition in the preceding sentence has been met
but in no event prior to August 1, 1996. The Press
Release shall announce the redemption and set forth the
number of shares of this Series which the Corporation
intends to redeem. The Corporation may redeem shares of
this Series pursuant to this Section 4(b) only if the
Class A Common Stock is listed or admitted to trading on a
national or regional securities exchange in the United
States or reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ").
(ii) Upon redemption of shares of this Series by
the Corporation in accordance with Section 4(b)(i) hereof
on the date specified in the notice to holders required
under Section 4(b)(iii) hereof (the "Redemption Date"),
each share of this Series so redeemed shall be redeemed
for a number of shares of Class A Common Stock equal to
$500.00 divided by the Conversion Price as of the opening
of business on the Redemption Date. The Redemption Date
shall be selected by the Corporation, shall be specified
in the notice of redemption and shall be not less than 15
days or more than 60 days after the date on which the
Corporation issues the Press Release.
Upon any redemption of this Series for Common
Stock pursuant to this Section 4(b), the Corporation shall
pay any accrued and unpaid dividends for any Dividend
Period ending on or prior to the Redemption Date. If a
Redemption Date falls after a dividend payment record date
and prior to the corresponding Dividend Payment Date, then
each holder of shares of this Series at the close of
business on such dividend payment record date shall be
entitled to the dividend payable on such shares on the
corresponding Dividend Payment Date notwithstanding the
redemption of such shares before such Dividend Payment
Date. In the case of any Redemption Date occurring prior
to the record date for the November 1, 1996 Dividend
Payment Date, the holders of the shares of this Series to
be redeemed on such Redemption Date shall be entitled to
any accrued and unpaid dividends through August 1, 1996
but not thereafter. Except as provided above, the
Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on shares of this
Series called for redemption under this Section 4(b) for
Class A Common Stock or on the shares of Class A Common
Stock issued upon such redemption.
(iii) If the Corporation elects to redeem shares
of this Series pursuant to Section 4(b)(i) hereof, notice
of such redemption shall be given not more than four
Business Days after the date on which the Corporation
issues the Press Release, to each holder of record of the
shares to be redeemed. Such notice shall be provided by
first class mail, postage prepaid, at such holder's
address as the same appears on the stock records of the
Corporation, and shall state, as appropriate: (1) the
Redemption Date; (2) the number of shares of this Series
(expressed in one-twentieths of a share of this Series) to
be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares
(expressed in one-twentieths of a share of this Series) to
be redeemed from such holder; (3) the number of shares of
Class A Common Stock to be issued with respect to each
one-twentieth of a share of this Series; (4) the place or
places at which certificates for such shares are to be
surrendered for certificates representing shares of
Class A Common Stock; and (5) the date on which dividends
on the shares to be redeemed shall cease to accrue as
provided herein. Failure to mail such notice, or any
defect therein or in the mailing thereof, to any
particular holder shall not affect the validity of the
proceeding for the redemption of any shares so to be
redeemed from any other holder.
At the close of business on the Redemption Date,
each holder of shares of this Series to be redeemed
(unless the Corporation defaults in the delivery of the
shares of Class A Common Stock or cash payable on such
Redemption Date) shall be deemed to be the record holder
of the number of shares of Class A Common Stock into which
such shares of this Series are to be redeemed, regardless
of whether such holder has surrendered the certificates
representing such holder's shares of this Series that have
been redeemed. As promptly as practicable after the
surrender in accordance with said notice of the
certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation
shall so require and the notice shall so state), such
shares shall be exchanged for certificates of shares of
Class A Common Stock and any cash (without interest
thereon) for which such shares have been redeemed.
(c)(i) At any time on or after August 1, 1999,
the shares of this Series may be redeemed, in whole or in
part, at the option of the Corporation at a redemption
price of $500.00 per share, plus an amount equal to all
accrued and unpaid dividends to and including the date
fixed for redemption. The Corporation may, except as
provided below, pay the redemption price in cash, Class A
Common Stock or any combination thereof; provided that the
Corporation may elect to pay the redemption price in whole
or in part in Class A Common Stock only if the Class A
Common Stock is listed or admitted to trading on a
national or regional securities exchange in the United
States or reported by NASDAQ; and provided, further that
any accrued and unpaid dividends must be paid in cash.
(ii) At least 15 days but not more than 60 days
prior to the date fixed for the redemption of the shares
of this Series in accordance with Section 4(c)(i) 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 such holder of the Corporation's election to
redeem such shares, stating the Call Date, stating the
Corporation's election with respect to whether the payment
of the redemption price is to be made in cash, Class A
Common Stock or a combination thereof, 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 number of
shares specified therein. On or after the Call Date, each
holder of shares of this Series to be redeemed must
present and surrender his certificate or certificates for
such shares to the Corporation at the place designated in
such notice and thereupon the redemption price of such
shares, in the manner elected by the Corporation, will be
paid and/or delivered to or on the order of the person
whose name appears on such certificate or certificates as
the owner thereof and each surrendered certificate will be
canceled. Except as provided in Section 4(c)(iv) hereof,
the Corporation may not change the form of consideration
(or components or percentages of components thereof) to be
paid by the Corporation in respect of such redemption once
the Corporation has given, or caused to be given, the
applicable redemption notice. At the close of business on
the Redemption Date, each holder of shares of this Series
to be redeemed (unless the Corporation defaults in the
delivery of the shares of Class A Common Stock or cash
payable on such Redemption Date) shall be deemed to be the
record holder of the number of shares of Class A Common
Stock into which such shares of this Series are to be
redeemed, regardless of whether such holder has
surrendered the certificates representing such holder's
shares of this Series that have been redeemed, dividends
on the shares of this Series so redeemed shall cease to
accrue, such shares shall be deemed to be no longer
outstanding, and all rights of the holders thereof as
holders of shares of this Series shall cease and
terminate.
(iii) If the Corporation elects to pay the
redemption price by the delivery of Class A Common Stock,
in whole or in part, the number of shares to be delivered
in respect of the specified percentage of the redemption
price to be paid in Class A Common Stock shall be equal to
the dollar amount of such specified percentage of the
redemption price divided by the Market Price of a share of
Class A Common Stock.
(iv) If the Market Price of the Class A Common
Stock is less than 90 per cent of the Weighted Average
Price of the Class A Common Stock over the five Trading
Days immediately prior to the date of the notice of
redemption provided for in Section 4(c)(ii), the
Corporation, at its option, may elect to pay the entire
redemption price on such Call Date in cash, rather than in
whole or in part with the shares of Class A Common Stock
specified in the notice of redemption; provided that, if
the Corporation so elects to pay the entire redemption
price in cash, the payment thereof shall be deferred until
as of the tenth Business Day following publication of the
notice of such election (the "Adjourned Call Date"), and
in such event the Corporation shall pay, in addition to
the redemption price, all accrued and unpaid dividends on
the shares of this Series to be redeemed through the
Adjourned Call Date. Upon determination of the actual
number of shares of Class A Common Stock issuable in
accordance with the foregoing provisions, the Corporation
will publish such determination (and, if it is entitled to
and so elects, notification of any exercise of the
election provided for in the preceding sentence, of the
Adjourned Call Date) promptly in The Wall Street Journal
or another daily newspaper of national circulation.
(d) No fractional shares or scrip representing
fractions of shares of Class A Common Stock shall be
issued upon redemption of this Series. Instead of any
fractional interest in a share of Class A Common Stock
that would otherwise be deliverable upon the redemption of
a share of this Series, the Corporation shall pay to the
holder of such share an amount in cash (computed to the
nearest cent) based upon the Market Price of Class A
Common Stock. If more than one share shall be surrendered
for redemption at one time by the same holder, the number
of full shares of Class A Common Stock issuable upon
redemption thereof shall be computed on the basis of the
aggregate number of shares of this Series so surrendered.
(e) The Corporation covenants that any shares of
Class A Common Stock issued upon redemption of this Series
shall be duly and validly issued, fully paid and non-
assessable, shall be issued from its authorized but
unissued shares and, except as provided in Section 9
hereof, will be free from all taxes, liens and charges
with respect to the issue thereof. The Corporation shall
endeavor to list the shares of Class A Common Stock
required to be delivered upon redemption of this Series,
prior to such redemption, upon each national securities
exchange, if any, upon which the outstanding Class A
Common Stock is listed at the time of such delivery. The
Corporation shall endeavor to take any action necessary to
ensure that any shares of Class A Common Stock issued upon
the redemption of this Series are freely transferable and
not subject to any resale restrictions under the
Securities Act of 1933, as amended (the "Act"), or any
applicable state securities or blue sky laws.
(f) If less than all the outstanding shares of
this Series are to be redeemed, the number of shares of
this Series to be redeemed and the method of effecting
such redemption, whether by lot or pro rata, shall be as
determined by the Board of Directors.
(g) At any time after a notice of redemption has
been given in the manner prescribed herein with respect to
a redemption in which the Corporation has elected to pay
the redemption price in whole in cash, 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 shall not be required for the redemption
for which they were deposited because of the exercise of
rights of conversion subsequent to the date of deposit
shall be returned to the Corporation forthwith, and 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.
(h) 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(g) 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 and, up to the close of business on the date
fixed for such redemption, the right to convert such
shares as set forth in Section 7 hereof) 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. If less than all of the shares represented by
any such surrendered certificate are redeemed, the
Corporation shall execute and deliver to the holder
thereof, or to his written order, a certificate or
certificates representing the unredeemed shares.
(i) In no event shall the Corporation redeem less
than all the outstanding shares of this Series and shares
of any other series of stock of the Corporation ranking,
as to dividends and distribution of assets upon
liquidation, dissolution or winding up of the affairs of
the Corporation, on a parity with the shares of this
Series ("Parity Stock") pursuant to this Section 4 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 such Parity Stock.
(j) In connection with any redemption of shares
of this Series solely for cash, the Corporation may enter
into an agreement with one or more investment bankers or
other purchasers for the purchase of the shares to be
redeemed from the holders thereof and the conversion of
such purchased shares into shares of Class A Common Stock
as provided in Section 7 hereof. Such agreement shall
provide that the amount to be paid by such purchasers to
the holders of the shares of this Series to be redeemed
shall not be less than the redemption price for such
shares together with all accrued and unpaid dividends
thereon to and including the date fixed for redemption and
may provide further that such amount be deposited in
trust, on or before the close of business on the date
fixed for redemption, with a bank or trust company
designated by the Corporation meeting the requirements set
forth in Section 4(g) hereof. Notwithstanding anything to
the contrary contained in this Section, the obligation of
the Corporation to pay the redemption price of the shares
of this Series to be redeemed, together with accrued and
unpaid dividends thereon to the date fixed for redemption,
shall be deemed to be satisfied and discharged to the
extent such amount is so paid by such purchasers. If such
an agreement is entered into, any shares of this Series to
be redeemed that have not been duly surrendered for
conversion by the holders thereof may, at the option of
the Corporation, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such
holders and (notwithstanding anything to the contrary
contained in this Section 4(j) or in Section 7 hereof)
surrendered by such purchasers for conversion, all as of
immediately prior to the close of business on the date
fixed for redemption, subject to payment of the above
amount as aforesaid.
(k) Definitions. For purposes of this
Section 4, the following terms shall have the meanings
indicated:
(i) "Accrued and unpaid dividends" in respect of
any share of this Series shall mean an amount computed at
the Dividend Rate for this Series from the date on which
dividends on such share became cumulative to and including
the date to which such dividends are to be accrued, less
the aggregate amount of all dividends theretofore paid
thereon. The amount accrued subsequent to the most recent
Dividend Period shall be computed by dividing the
quarterly dividend payment by the actual number of days in
the uncompleted quarter, and thereafter multiplying this
figure by the number of days in such quarter up to and
including the date to which dividends are to be accrued.
(ii) "Business Day" shall mean any day other than
a Saturday or Sunday or a day on which state or federally
chartered banking institutions in New York, New York are
not required to be open.
(iii) "Conversion Price" shall have the meaning
set forth in, and shall be subject to adjustment from time
to time as provided in, Section 7(d) hereof.
(iv) "Current Market Price" in respect of the
Class A Common Stock means the last reported sales price,
regular way, on such day, or, if no sale takes place on
such day, the average of the reported closing bid and
asked prices on such day, regular way, in either case as
reported in the composite transactions for the New York
Stock Exchange or, if such security is not listed or
admitted for trading on the New York Stock Exchange, on
the principal national or regional securities exchange in
the United States on which the Class A Common Stock is
listed or admitted to trading, or if the Class A Common
Stock is not listed or admitted to trading on a national
or regional securities exchange in the United States, on
the National Market System of NASDAQ or, if the Class A
Common Stock is not quoted on such National Market System,
the average of the closing bid and asked prices on such
day in the over-the-counter market as reported by NASDAQ,
or if bid and asked prices for such security on such day
shall not have been reported through NASDAQ or by the
National Quotation Bureau Incorporated, the average of the
bid and asked prices on such day as furnished by any New
York Stock Exchange member firm regularly making a market
in such security selected for such purpose by the Board of
Directors of the Corporation.
(v) "Market Price" means the Weighted Average
Price of a share of Class A Common Stock over the five
Trading Day period ending on the third Business Day prior
to the applicable Redemption Date or Call Date (or, if
such third Business Day is not a Trading Day, on the last
Trading Day prior to such Business Day), appropriately
adjusted to take into account the occurrence, during the
period commencing on the first of such Trading Days and
ending on such Redemption Date or Call Date, of any event
described in Section 7(d) hereof.
(vi) "Trading Day" shall mean any day on which
the securities in question are traded on the New York
Stock Exchange, or if such securities are not listed or
admitted for trading on the New York Stock Exchange, on
the principal national or regional securities exchange on
which such securities are listed or admitted, or if not
listed or admitted for trading on any national or regional
securities exchange, on the National Market System of
NASDAQ, or if such securities are not quoted on such
National Market System, in the applicable securities
market in which the securities are traded.
(vii) "Weighted Average Price" of a share of Class
A Common Stock on any Trading Day or over any period of
Trading Days means the weighted average per share sale
price for all sales of shares of Class A Common Stock on
such Trading Day or during such period, as the case may be
(or, if the information necessary to calculate such
weighted average per share sale price is not reported, the
average of the high and low sale prices or, if no sales
prices are reported, the average of the bid and ask prices
or, if more than one in either case, the average of the
average bid and average ask prices) as reported in the
composite transactions for the New York Stock Exchange, or
if the Class A Common Stock is not listed or admitted to
trading on such Exchange, as reported in the composite
transactions for the principal national or regional
securities exchange in the United States on which the
Class A Common Stock is listed or admitted to trading, or
if the Class A Common Stock is not listed or admitted to
trading on a United States national or regional securities
exchange, as reported by NASDAQ or by the National
Quotation Bureau Incorporated; provided that, in the
absence of such quotations, the Corporation shall be
entitled to determine the Weighted Average Price on the
basis of such quotations as it considers appropriate.
5. Voting Rights. (a) Except for the voting
rights described below and except as otherwise provided 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 such series of
Preferred Stock 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 Preferred Stock of such 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 and 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. 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 amount of $500.00 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
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 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.
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 this Section 6,
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. Conversion Privilege. (a) Subject to and
upon compliance with the provisions of this Section 7, at
the option of the holder thereof, each share of this
Series may, at any time (unless shares of this Series
shall be called for redemption, then, with respect to
shares of this Series so called, until and including, but,
if the Corporation shall not default in making payment of
the amount payable on such redemption, not after, the
close of business on the date fixed for redemption), be
converted into a number of fully paid and nonassessable
shares of Class A Common Stock equal to the quotient
obtained by dividing $500.00 by the Conversion Price (as
hereinafter defined) in effect at the Date of Conversion
(as hereinafter defined).
(b) In order to exercise the conversion
privilege, any holder of shares of this Series to be
converted shall surrender such shares to the Corporation
at any time during usual business hours at the place or
places (including a place in the Borough of Manhattan, The
City of New York) maintained for such purpose, accompanied
by a fully executed written notice, in substantially the
form set forth on the reverse of the certificate
representing shares of this Series, that the holder elects
to convert such shares. Such notice shall also state the
name or names (with address) in which the certificate or
certificates for shares of Class A Common Stock shall be
issued. Shares of this Series surrendered for conversion
shall (if so required by the Corporation) be properly
endorsed or assigned for transfer by the holder or his
attorney duly authorized in writing. The holders of
shares of this Series at the close of business on any
record date for the payment of dividends on such shares
will be entitled to receive the dividend payable on such
shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof or the
Corporation's default in the payment of the dividend due
on such Dividend Payment Date. Shares of this Series
surrendered for conversion during the period from the
close of business on any record date for the payment of
dividends on such shares to the opening of business on the
corresponding Dividend Payment Date (except shares called
for redemption on a Redemption Date or Call Date during
the period from such record date to and including the
Dividend Payment Date) must be accompanied by payment of
an amount equal to the dividend payable on such shares on
such Dividend Payment Date. A holder of shares of this
Series on a record date for the payment of dividends on
such shares who converts such shares on a Dividend Payment
Date will receive the dividend payable on such shares by
the Corporation on such date, and the converting holder
need not include a payment in the amount of any such
dividend upon surrender of such shares for conversion. As
promptly as practicable after the receipt of such notice
and the surrender of such shares of this Series as
aforesaid, the Corporation shall, subject to the
provisions of Section 9 hereof, issue and deliver at such
place or places referred to in this subsection (b) to such
holder, or on his written order, a certificate or
certificates for the number of full shares of Class A
Common Stock issuable on such conversion of shares of this
Series in accordance with the provisions of this Section,
and cash, as provided in Section 7(c) hereof, in respect
of any fraction of a share of Class A Common Stock
otherwise issuable upon such conversion. Such conversion
shall be deemed to have been effected immediately prior to
the close of business on the date (herein called the "Date
of Conversion") on which such notice shall have been
received by the Corporation and such shares of this Series
shall have been surrendered as aforesaid, and the person
or persons in whose name or names any certificate or
certificates for shares of Class A Common Stock shall be
issuable upon such conversion shall be deemed to have
become on the Date of Conversion the holder or holders of
record of the shares of Class A Common Stock represented
thereby; provided, that any such surrender on any date
when the registry books of the Corporation shall be closed
shall constitute the person or persons in whose name or
names the certificate or certificates for such shares are
to be issued as the record holder or holders thereof for
all purposes at the opening of business on the next
succeeding day on which such registry books are open, but
such conversion shall nevertheless be at the Conversion
Price in effect at the close of business on the date when
such shares of this Series shall have been so surrendered
with the conversion notice. In the case of conversion of
a portion, but less than all, of the shares of this Series
represented by a certificate surrendered for conversion,
the Corporation shall execute, and deliver to the holder
thereof, or on his written order, a certificate or
certificates representing the shares of this Series which
the holder has not elected to convert into shares of Class
A Common Stock. No payment or adjustment shall be made
for dividends accrued on the shares of this Series
converted as provided in this Section or for dividends or
distributions accrued on any Class A Common Stock.
(c) No fractions of shares or scrip representing
fractions of shares shall be issued upon conversion of
shares of this Series. If more than one share of this
Series shall be surrendered for conversion at one time by
the same holder, the number of full shares of Class A
Common Stock which shall be issuable upon conversion of
such shares shall be computed on the basis of the
aggregate number of shares of this Series surrendered for
conversion. If any fraction of a share of Class A Common
Stock would, except for the provisions of this
Section 7(c), be issuable on the conversion of any shares
of this Series, the Corporation shall make payment in lieu
thereof in an amount of United States dollars equal to the
value of such fraction computed on the basis of the
closing price of the Class A Common Stock as reported on
the Composite Tape for New York Stock Exchange - Listed
Stocks (or if the Class A Common Stock is not listed or
admitted to trading on such exchange on the Date of
Conversion, then on the principal national or regional
securities exchange on which the Class A Common Stock is
then listed or admitted to trading, or, if not listed or
admitted to trading on any national or regional securities
exchange, then as reported by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar
organization if NASDAQ is no longer reporting information)
on the last Trading Day prior to the Date of Conversion or
if no such sale takes place on such day, the last sale
price for such day shall be the average of the closing bid
and asked prices regular way on the New York Stock
Exchange (or if the Class A Common Stock is not listed or
admitted to trading on such exchange, on the principal
national securities exchange on which the Class A Common
Stock is then listed or admitted to trading, or, if not
listed or admitted to trading on any national securities
exchange, the average of the highest bid and lowest asked
prices as reported by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar
organization if NASDAQ is no longer reporting information)
(any such last sale price being herein referred to as the
"Last Sale Price"). If on such Trading Day the Class A
Common Stock is not quoted by any such organization, the
fair value of such Class A Common Stock on such day, as
determined by the Board of Directors, shall be used. For
the purpose of this subsection (c), the term "Trading Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not
traded on such exchange or in such market.
(d) The Conversion Price per share of Class A
Common Stock issuable upon conversion of shares of this
Series (herein called the "Conversion Price") shall
initially be $30.75. The Conversion Price shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall (1) pay a
dividend or make a distribution in shares of Class A
Common Stock, (2) subdivide its outstanding shares of
Class A Common Stock into a greater number of shares
or (3) combine its outstanding shares of Class A
Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such
action shall be adjusted so that the holder of any
shares of this Series thereafter surrendered for
conversion shall be entitled to receive the number of
shares of Class A Common Stock which he would have
owned or have been entitled to receive immediately
following such action had such shares been converted
immediately prior thereto. An adjustment made
pursuant to this subsection (d)(i) shall become
effective immediately, except as provided in
subsection (d)(v) below, after the record date in the
case of a dividend or distribution and shall become
effective immediately after the effective date in the
case of a subdivision or combination.
(ii) In case the Corporation shall issue rights,
warrants or options to all holders of Class A Common
Stock entitling them (for a period not exceeding 45
days from the date of such issuance) to subscribe for
or purchase shares of Class A Common Stock at a price
per share less than the Recent Market Price per share
(as determined pursuant to subsection (d)(iv) below)
of the Class A Common Stock on the record date
mentioned below, the Conversion Price shall be
adjusted to a price, computed to the nearest cent, so
that the same shall equal the price determined by
multiplying:
(1) the Conversion Price in effect
immediately prior to the date of issuance of such
rights or warrants by a fraction, of which
(2) the numerator shall be (A) the number of
shares of Class A Common Stock outstanding on the
date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of shares which the aggregate
offering price of the total number of shares so
offered for subscription or purchase would
purchase at such Recent Market Price, (determined
by multiplying such total number of shares by the
exercise price of such rights, warrants or
options and dividing the product so obtained by
such Recent Market Price), and of which
(3) the denominator shall be (A) the number
of shares of Class A Common Stock outstanding on
the date of issuance of such rights, warrants or
options, immediately prior to such issuance, plus
(B) the number of additional shares of Class A
Common Stock which are so offered for
subscription or purchase.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date for the determination of holders
entitled to receive such rights and warrants.
(iii) In case the Corporation shall distribute to
all or substantially all holders of Class A Common
Stock evidences of indebtedness, equity securities
(including equity interests in the Corporation's
Subsidiaries (as hereinafter defined)) other than
Class A Common Stock, or other assets (other than cash
dividends paid out of earned surplus of the
Corporation or, if there shall be no earned surplus,
out of net profits for the fiscal year in which the
dividend is made and/or the preceding fiscal year), or
shall distribute to all or substantially all holders
of Class A Common Stock rights or warrants to
subscribe for securities (other than those referred to
in subsection (d)(ii) above), then in each such case
the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying:
(1) the Conversion Price in effect
immediately prior to the date of such
distribution by a fraction, of which
(2) the numerator shall be the Recent Market
Price per share (as determined pursuant to
subsection (d)(iv) below) of the Class A Common
Stock on the record date mentioned below less the
then fair market value (as determined by the
Board of Directors, whose determination shall be
conclusive evidence of such fair market value,
and described in a resolution of the Board of
Directors filed with the transfer agent for the
shares of this Series) of the portion of the
assets, evidences of indebtedness and equity
securities so distributed or of such subscription
rights or warrants applicable to one share of
Class A Common Stock, and of which
(3) the denominator shall be such Recent
Market Price per share of the Class A Common
Stock.
Such adjustment shall become effective immediately,
except as provided in subsection (d)(v) below, after
the record date for the determination of stockholders
entitled to receive such distribution. As used
herein, the term "Subsidiary" means (i) any
corporation or other entity of which securities or
other ownership interests having ordinary voting power
to elect a majority of the Board of Directors or other
persons performing similar functions are at the time
directly or indirectly owned by the Corporation or
(ii) any partnership of which more than 50% of the
partnership interests are owned by the Corporation or
any Subsidiary.
(iv) For purposes of any computation under
subsections (d)(ii) and (d)(iii) above, the Recent
Market Price per share of Class A Common Stock on any
date shall be deemed to be the average of the Last
Sale Prices of a share of Class A Common Stock for the
five consecutive Trading Days selected by the
Corporation commencing not more than 20 Trading Days
before and ending not later than the earliest of the
date in question and the date before the "ex" date
with respect to the issuance or distribution requiring
such computation. If on any such Trading Day the
Class A Common Stock is not quoted by any organization
referred to in the definition of Last Sale Price in
Section 7(c), the fair value of the Class A Common
Stock on such day, as determined by the Board of
Directors, shall be used. For purposes of this
paragraph, the term "'ex' date", when used with
respect to any issuance or distribution, means the
first date on which the Class A Common Stock trades
regular way on the principal national securities
exchange on which the Class A Common Stock is listed
or admitted to trading (or, if not so listed or
admitted, on NASDAQ or a similar organization if
NASDAQ is no longer reporting trading information)
without the right to receive such issuance or
distribution.
(v) In any case in which this subsection (d) shall
require that an adjustment be made immediately
following a record date, the Corporation may elect to
defer the effectiveness of such adjustment (but in no
event until a date later than the effective time of
the event giving rise to such adjustment), in which
case the Corporation shall, with respect to any shares
of this Series converted after such record date and
before such adjustment shall have become effective (1)
defer paying any cash payment pursuant to Section 7(c)
hereof or issuing to the holder of shares of this
Series the number of shares of Class A Common Stock
issuable upon conversion in excess of the number of
shares of Class A Common Stock issuable thereupon only
on the basis of the Conversion Price prior to
adjustment and (2) not later than five business days
after such adjustment shall have become effective, pay
to such holder the appropriate cash payment pursuant
to Section 7(c) hereof and issue to such holder the
additional shares of Class A Common Stock issuable on
such conversion.
(vi) No adjustment in the Conversion Price shall
be required unless such adjustment would require an
increase or decrease of at least 1% in the Conversion
Price; provided, that any adjustments which by reason
of this subsection (d)(vi) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 7 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(vii) Whenever the Conversion Price is adjusted as
herein provided, the Corporation shall promptly (1)
file with the transfer agent for the shares of this
Series a certificate of an officer of the Corporation
(an "Officers' Certificate") setting forth the
Conversion Price after such adjustment and setting
forth in reasonable detail the facts requiring such
adjustment and the calculations on which the
adjustment is based, which certificate shall be
conclusive evidence of the correctness of such
adjustment and (2) mail or cause to be mailed a notice
of such adjustment to each holder of shares of this
Series at his address as the same appears on the
registry books of the Corporation.
Notwithstanding anything in this Section 7 to the
contrary, the Corporation shall be entitled to make such
reductions in the Conversion Price, in addition to those
required by this Section 7, as it in its discretion shall
determine to be advisable in order that any stock
dividend, subdivision or combination of shares,
distribution of rights or warrants to purchase stock or
securities, distribution of securities convertible into or
exchangeable for stock, or distribution of assets (other
than cash dividends) hereafter made by the Corporation to
its stockholders shall not be taxable.
(e) In case of any reclassification or change of
outstanding shares of Class A Common Stock (other than a
change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a
subdivision or combination), or in case of any
consolidation of the Corporation with, or merger of the
Corporation into, any other Person, or any merger of
another Person into the Corporation (other than a merger
which does not result in any reclassification, change,
conversion, exchange or cancellation of outstanding shares
of Class A Common Stock) or any sale or transfer of all or
substantially all of the assets of the Corporation, the
Corporation, or the Person formed by such consolidation or
resulting from such merger or which acquires such assets,
as the case may be, shall make effective provision in the
articles or certificate of incorporation, providing that
the holder of each share of this Series then outstanding
shall have the right thereafter to convert such share only
into the kind and amount of securities, cash and other
property receivable upon such reclassification, change,
consolidation, merger, sale or transfer, by a holder of
the number of shares of Class A Common Stock into which
such shares of this Series might have been converted
immediately prior to such reclassification, change,
consolidation, merger, sale or transfer, assuming such
holder of Class A Common Stock of the Corporation (i) is
not a Person with which the Corporation consolidated or
into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as
the case may be ("constituent Person"), or an Affiliate
(as hereinafter defined) of a constituent Person and (ii)
failed to exercise his rights of election, if any, as to
the kind or amount of securities, cash and other property
receivable upon such reclassification, change,
consolidation, merger, sale or transfer (provided that if
the kind or amount of securities, cash and other property
receivable upon such reclassification, change,
consolidation, merger, sale or transfer is not the same
for each share of Class A Common Stock of the Corporation
held immediately prior to such reclassification, change,
consolidation, merger, sale or transfer by others than a
constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of
this subsection (e) the kind and amount of securities,
cash and other property receivable upon such
reclassification, change, consolidation, merger, sale or
transfer by each non-electing share shall be deemed to be
the kind and amount so receivable per share by a plurality
of the non-electing shares). Such articles or certificate
of incorporation shall provide for adjustments which, for
events subsequent to the effective date of such articles
or certificate of incorporation, shall be as nearly
equivalent as may be practicable to the adjustments
provided for herein. The above provisions of this
subsection (e) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales
or transfers.
For the purpose of this subsection (e), the term
"Person" means any individual, Corporation, partnership,
joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof,
and the term "Affiliate" of any specified Person means any
other Person directly or indirectly controlling or
controlled by or under direct or indirect common control
with such specified Person. For the purposes of the
definition of "Affiliate", the term "control" when used
with respect to any specified Person means the power to
direct the management and policies of such Person,
directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative
to the foregoing.
(f) The Corporation shall reserve, free from
preemptive rights, out of its authorized but unissued
shares, sufficient shares of Class A Common Stock to
provide for the conversion of the shares of this Series
from time to time outstanding as such shares of this
Series are presented for conversion.
(g) The Corporation covenants that all shares of
Class A Common Stock which may be issued upon conversion
of shares of this Series will upon issue be duly and
validly issued, fully paid and nonassessable by the
Corporation and except as provided in Section 9 hereof
free from all taxes, liens and charges with respect to the
issue thereof.
8. Notice of Certain Events. In case:
(a) the Corporation shall declare a dividend (or
any other distribution) payable to the holders of Class A
Common Stock (otherwise than cash dividends paid out of
the earned surplus of the Corporation or, if there shall
be no earned surplus, out of net profits for the fiscal
year in which the dividend is made and/or the preceding
fiscal year, and dividends payable in Class A Common
Stock); or
(b) the Corporation shall authorize the granting
to the holders of Class A Common Stock of rights to
subscribe for or purchase any shares of stock of any class
or of any other rights or warrants; or
(c) the Corporation shall authorize any
reclassification or change of the Class A Common Stock
(other than a subdivision or combination of its
outstanding shares of Class A Common Stock or a change in
par value, or from par value to no par value, or from no
par value to par value), or any consolidation, merger or
share exchange to which the Corporation is a party and for
which approval of any stockholders of the Corporation is
required, or the sale or conveyance of all or
substantially all the property or business of the
Corporation; or
(d) there shall be proposed any voluntary or
involuntary dissolution, liquidation or winding-up of the
Corporation;
then, the Corporation shall cause to be filed at the place
or places maintained for the purpose of conversion of
shares of this Series as provided in Section 7(b) hereof,
and shall cause to be mailed to each holder of shares of
this Series, at his address as it shall appear on the
registry books of the Corporation, as promptly as possible
but in any event at least 20 days before the date
hereinafter specified (or the earlier of the dates
hereinafter specified, in the event that more than one
date is specified), a notice stating the date on which (i)
a record is expected to be taken for the purpose of such
dividend, distribution, rights, or warrants, or if a
record is not to be taken, the date as of which the
holders of Class A Common Stock of record to be entitled
to such dividend, distribution, rights, or warrants are to
be determined, or (ii) such reclassification, change,
consolidation, merger, share exchange, sale, transfer,
conveyance, dissolution, liquidation or winding-up is
expected to become effective and the date, if any is to be
fixed, as of which it is expected that holders of Class A
Common Stock of record shall be entitled to exchange their
shares of Class A Common Stock for securities or other
property deliverable upon such reclassification, change,
consolidation, merger, share exchange, sale, transfer,
conveyance, dissolution, liquidation or winding-up.
9. 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 (a) 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 (b) certificates for shares of Class A Common Stock on
redemption or conversion of shares of this Series pursuant
to Section 4 or Section 7 hereof; 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 or Class A Common Stock, as the case may be, in a
name other than that of the holder of shares of this
Series to be redeemed or converted 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 conversion of shares of this Series.
10. 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 Secretary as of this 6th day of
July, 1993.
FREEPORT-McMoRan COPPER & GOLD
INC.
By /s/ Stephen M. Jones
Name: Stephen M. Jones
Title: Vice President
(CORPORATE SEAL)
Attest:
By /s/ Michael C. Kilanowski, Jr.
Name: Michael C. Kilanowski, Jr.
Title: Secretary
Exhibit 4.5
FREEPORT-McMoRan COPPER & GOLD INC.
and
MELLON SECURITIES TRUST COMPANY,
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
____________
DEPOSIT AGREEMENT
____________
Dated as of July 1, 1993
__________________________________________________
TABLE OF CONTENTS
Page
Parties . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
"Certificate of Designations" . . . . . . . . . 1
"Certificate of Incorporation" . . . . . . . . 1
"Common Stock" . . . . . . . . . . . . . . . . 2
"Company" . . . . . . . . . . . . . . . . . . . 2
"Corporate Office" . . . . . . . . . . . . . . 2
"Deposit Agreement" . . . . . . . . . . . . . . 2
"Depositary" . . . . . . . . . . . . . . . . . 2
"Depositary Share" . . . . . . . . . . . . . . 2
"Depositary's Agent" . . . . . . . . . . . . . 2
"New York Office" . . . . . . . . . . . . . . . 3
"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,
REDEMPTION AND CONVERSION 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 Conversion
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 Absence of Withdrawal Rights . . 8
SECTION 2.07 Limitations on Execution and Delivery,
Transfer, Split-up, Combination,
Surrender and Exchange of Receipts
and Withdrawal or Deposit of Stock 8
SECTION 2.08 Lost Receipts, etc. . . . . . . . 9
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 . . . . . . 10
SECTION 3.02 Payment of Taxes or Other
Governmental Charges . . . . . 10
SECTION 3.03 Withholding . . . . . . . . . . 11
SECTION 3.04 Representations and Warranties
as to Stock . . . . . . . . . 11
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 . . . . 15
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 . . . . . . . . 15
SECTION 5.02 Prevention or Delay in Performance
by the Depositary, the Depositary's
Agents, the Registrar or the
Company . . . . . . . . . . . 16
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 20
SECTION 5.07 Indemnification by the Company . 20
SECTION 5.08 Fees, Charges and Expenses . . . 21
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01 Amendment . . . . . . . . . . . 21
SECTION 6.02 Termination . . . . . . . . . . 21
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Counterparts . . . . . . . . . . 22
SECTION 7.02 Exclusive Benefits of Parties . 23
SECTION 7.03 Invalidity of Provisions . . . . 23
SECTION 7.04 Notices . . . . . . . . . . . . 23
SECTION 7.05 Depositary's Agents . . . . . . 24
SECTION 7.06 Holders of Receipts Are Parties 24
SECTION 7.07 Governing Law . . . . . . . . . 24
SECTION 7.08 Headings . . . . . . . . . . . . 24
TESTIMONIUM . . . . . . . . . . . . . . . . . . 25
SIGNATURES . . . . . . . . . . . . . . . . . . 25
EXHIBIT A . . . . . . . . . . . . . . . . . . . A-1
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of July 1, 1993
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.
"Common Stock" shall mean the Company's Class
A Common Stock, par value $0.10 per share.
"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, conversion, exchange, 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
Step-Up Convertible Preferred Stock, par value $0.10
per share.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER,
REDEMPTION AND CONVERSION 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 Conversion of
Stock. Whenever the Company shall elect to redeem
shares of Stock into shares of Common 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 15 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 redemption date;
the number of Depositary Shares to be redeemed if
fewer than all the Depositary Shares held by any
holder are to be redeemed the number of such
Depositary Shares held by such holder to be so
redeemed; in the case of a call for redemption, the
call price payable upon redemption (and the form of
consideration, whether cash, securities or other
consideration, on which the redemption call price will
be paid); the place or places where Receipts
evidencing Depositary Shares to be redeemed are to be
surrendered for redemption; whether the Company is
depositing with a bank or trust company on or before
the redemption date, the cash payable by the Company
and the proposed date of such deposit; the amount of
accrued and unpaid dividends payable per share of
Stock to be redeemed to and including such redemption
and that dividends in respect of the Stock represented
by the Depositary Shares to be redeemed will cease to
accrue on such redemption date (unless the Company
shall default in delivering cash or other
consideration at the time and place specified in such
notice). 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. In case fewer than all the outstanding
Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed shall be selected by the
Depositary by lot or on a pro rata basis at the
direction of the Company.
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, securities or form of consideration 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 (whether to be paid in the form
of cash, shares of Common Stock or other form or forms
of consideration) 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 a record holder of Receipts shall
duly deliver, in person or by a duly authorized
attorney, such Receipts (properly endorsed or assigned
for transfer, as the Depositary shall require) to the
Depositary at the New York Office, together with
written notice of such record holder's election to
convert the Depositary Shares evidenced by such
Receipts into Common Stock (provided that any delivery
of Receipts evidencing Depositary Shares that have
been called for redemption may not occur after the
close of business on the date fixed for redemption),
the Depositary shall promptly notify the Company of
such record holder's election and deliver to the
Company certificates evidencing such Stock as are
represented by the Depositary Shares evidenced by such
Receipts delivered by such record holder for
conversion. From and after the close of business on
any business day on which a record holder duly
delivers the foregoing documents to the Depositary,
such Depositary Shares shall be deemed converted into
Common Stock at a conversion rate to be communicated
to the Depositary in writing, which conversion rate
will be equal to 0.05 times the conversion rate for
each share of Stock as set forth in the Certificate of
Designations.
From and after the conversion date (unless
the Company shall have failed to convert the shares of
Stock to be converted by it upon the surrender of the
certificate or certificates therefor by the Depositary
as described in the immediately preceding paragraph),
the Depositary Shares subject to conversion 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,
securities or shares of Common Stock payable upon
conversion upon surrender of such Receipts) shall, to
the extent of such Depositary Shares, cease and
terminate.
To the extent that Depositary Shares are
converted into shares of Common Stock and all of such
shares of Common Stock cannot be distributed to the
record holders of Receipts converted without creating
fractional interests in such shares, the Company may
distribute, or cause to be distributed, cash to such
holders in lieu of delivery of such fractional shares
or, if the Company elects not to make or cause to be
made such a distribution, the Depositary may, with the
consent of the Company, 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 such shares of Common Stock at such
place or places and upon such terms as it may deem
proper, and the net proceeds of any such sale shall,
subject to Section 3.02, be distributed or made
available for distribution to such record holders that
would otherwise receive fractional interests in such
shares of Common Stock.
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. Absence of Withdrawal Rights.
Holders of Depositary Receipts are not entitled to
receive the shares of Stock or money and other
property, if any, represented by the Depositary Shares
evidenced by such Receipts.
SECTION 2.07. Limitations on Execution and
Delivery, Transfer, Split-up, Combination, Surrender
and Exchange of Receipts and Withdrawal or Deposit of
Stock. As a condition precedent to the execution and
delivery, registration of transfer, split-up,
combination, surrender or exchange of any Receipt, the
delivery of any distribution thereon or the withdrawal
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 the Common
Stock or other securities or property of the Company
being issued upon conversion or 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, the
delivery of Receipts against Stock or the registration
of transfer, split-up, combination, surrender or
exchange 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 cancelled.
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, redemption, conversion or
exchange 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 of 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 (including Common
Stock received in connection with a conversion or
redemption of Stock) 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 and exchanges made with
respect to the Depositary Shares and Receipts, and the
Stock, Common Stock or other securities or assets
represented thereby (collectively, the "Securities").
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
of the mandatory conversion of, or any election on the
part of the Company to call for the redemption or
exchange 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 conversion, exchange or 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
upon conversion of 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
upon conversion 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 and exchange, split-up,
combination, redemption, exchange and conversion 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 and exchange, split-up, combination,
conversion, exchange 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 and exchange, split-up, combination,
redemption or conversion 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, Receipts or Common Stock
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, the Receipts or the Common Stock or other
securities issued upon conversion, 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. Every holder of an outstanding
Receipt at the time 90 days after such notice of
amendment shall have been given shall be deemed, by
continuing to hold such Receipt, to consent and agree
to such amendment and to be bound by this Deposit
Agreement as amended thereby. 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 90 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.
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.
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 4.6
NOT MORE DEPOSITARY RECEIPT NOT MORE
THAN 100,000 FOR DEPOSITARY SHARES, THAN 100,000
SHARES EACH REPRESENTING SHARES
0.05 OF A SHARE OF
NUMBER STEP-UP CONVERTIBLE DEPOSITARY SHARES
FCXP PREFERRED STOCK
OF SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 35671D 50 1
FREEPORT-McMoRaN COPPER & GOLD INC.
(incorporated under the laws of the State of Delaware)
Mellon Securities Trust Company (the "Depositary") hereby certifies that
is the registered owner of Depositary Shares
(the "Depositary Shares"), each Depositary Share representing 0.05 of a
share of Step-Up Convertible Preferred Stock, $0.10 par value (the
"Stock"), of Freeport-McMoRan Copper & Gold Inc., a corporation duly
organized and existing under the laws of the State of Delaware (the
"Company"), deposited with the Depositary and the same proportionate
interest in any and all other property received by the Depositary in
respect of such shares of Stock and held by the Depositary under the
Deposit Agreement (as defined below). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share is entitled, proportionately,
to all the rights, preferences and privileges of the Stock represented
thereby, including the dividend, conversion, exchange, voting, liquidation
and other rights contained in the Certificate of Designations establishing
the rights, preferences, privileges and limitations of the Stock (the
"Certificate of Designations"), copies of which are on file at the office
of the Depositary at which at any particular time its business in respect
of matters governed by the Deposit Agreement shall be administered, which
at the time of the execution of the Deposit Agreement is located at the
Depositary's corporate trust office in the Borough of Manhattan in the City
of New York (the "New York City Office").
This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any
purpose unless this Receipt shall have been executed manually or, if a
Registrar for the Receipts (other than the Depositary) shall have been
appointed, by facsimile by the Depositary by the signature of a duly
authorized officer and, if executed by facsimile signature of the
Depositary, shall have been countersigned manually by such Registrar by the
signature of a duly authorized officer.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED
STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF
THE COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT.
UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES
NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR
SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER
THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR
SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY
SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF THE
DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES.
The Company will furnish to any holder of this Receipt without charge,
upon request addressed to its executive office, a full statement of the
designation, relative rights, preferences and limitations of the shares of
each authorized class, and of each class of preferred stock authorized to be
issued, so far as the same may have been fixed, and a statement of the
authority of the Board of Directors of the Company to designate and fix the
relative rights, preferences and limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.
Dated: MELLON SECURITIES TRUST COMPANY,
as Depositary, Transfer Agent and Registrar
By:
Authorized Officer
Further Conditions and Agreements Forming Part of this Receipt Appear on the
Reverse Side
FURTHER CONDITIONS AND AGREEMENTS
FORMING PART OF THIS RECEIPT
1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of
which this Receipt is one, are made available upon the terms and conditions
set forth in the Deposit Agreement, dated as of July 1, 1993 (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to
time of Receipts. The Deposit Agreement (copies of which are on file at
the Corporate Office, the office maintained by the Depositary in the
Borough of Manhattan, the City of New York which at the time of the
execution of the Deposit Agreement is located at 120 Broadway, New York,
N.Y. (the "New York Office") and at the office of any agent of the
Depositary) sets forth the rights of holders of Receipts and the rights and
duties of the Depositary. The statements made on the face and the reverse
of this Receipt are summaries of certain provisions of the Deposit
Agreement and are subject to the detailed provisions thereof, to which
reference is hereby made, in the event of any conflict between the
provisions of this Receipt and the provisions of the Deposit Agreement, the
provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Redemption at the Option of the Company; Conversion at the Option
of the Holder. Whenever the Company shall elect to redeem shares of Stock
into shares of Class A Common 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 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 Depositary Shares representing the Stock to be redeemed, not
less than 15 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. 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. 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. In case fewer than all the
outstanding Depositary Shares are to be redeemed, the Depositary Shares to
be redeemed shall be selected by the Depositary by lot or on a pro rata
basis at the direction of the Company. Notice having been mailed 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 above), the Depositary Shares called for redemption shall be
deemed to be outstanding and all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the shares
of Class A Common Stock and cash, if any, payable upon redemption upon
surrender of such Receipts) shall, to the extent of such Depositary Shares,
cease and terminate. The foregoing is subject further to the terms and
conditions of the Certificate of Designations. If fewer than all of the
Depositary Shares evidenced by this Receipt are called for redemption, the
Depositary will deliver to the holder of this Receipt upon its surrender to
the Depositary, together with the redemption price (whether to be paid in
the form of cash, shares of Class A Common Stock or other form or forms of
consideration) 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.
Whenever a record holder of receipts shall duly deliver, in person or by
a duly authorized attorney, such Receipts (properly endorsed or assigned for
transfer, as the Depositary shall require) to the Depositary at the New York
Office, together with written notice of such record holder's election to
convert the Depositary Shares evidenced by such Receipts into Class A Common
Stock (provided that any delivery of Receipts evidencing Depositary Shares
that have been called for redemption may not not occur after the close of
business on the date fixed for redemption) the Depositary shall promptly
notify the Company of such record holder's election and deliver to the
Company certificates evidencing such Stock as are represented by the
Depositary Shares evidenced by such Receipts delivered by such record
holder for conversion. From and after the close of business on any
business day on which a record holder duly delivers the foregoing documents
to the Depositary, such Depositary Shares shall be deemed converted into
Class A Common Stock at a conversion rate to be communicated to the
Depositary in writing, which conversion rate will be equal to 0.05 times
the conversion rate for each share of Stock as set forth in the Certificate
of Designations.
4. Withdrawal of Stock Not Permitted. Holders of Receipts are not
entitled to receive any of the shares of Stock represented by such Receipts.
5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7 and 8
below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or the New
York Office, or at such other offices as the Depositary may designate properly
endorsed or accompanied by a properly executed instrument of transfer, and
upon such transfer the Depositary shall sign and deliver a Receipt or Receipts
to or upon the order of the person entitled thereto, all as provided in and
subject to the Deposit Agreement. This Receipt may be split into other
Receipts or combined with other Receipts into one Receipt evidencing the same
aggregate number of Depositary Shares evidenced by 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.
6. Conditions to Signing and Delivery, Transfer, etc. of Receipts.
Prior to the execution and delivery, registration of transfer, split-up,
combination, surrender or exchange of this Receipt, the delivery of any
distribution hereon or the 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 Stock being
deposited or withdrawn or with respect to Class A Common Stock or other
securities or property of the Company being issued upon conversion or
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 Deposit Agreement. Any person
presenting Stock for deposit, or any holder of this Receipt, may be
required to file such proof of 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 this Receipt, the
registration of transfer, redemption or conversion of this 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.
7. Suspension of Delivery, Transfer, etc. The deposit of Stock may be
refused and the delivery of this Receipt against Stock or the registration of
transfer, split-up, combination, surrender or exchange of this Receipt 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 the Deposit
Agreement, or (iii) with the approval of the Company, for any other reason.
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, subject to conversion except as provided in
the last sentence of Paragraph 3.
8. 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) this Receipt, (ii) the Depositary Shares
evidenced by this 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 of the Deposit Agreement, such tax
(including transfer, issuance or acquisition taxes, if any, or governmental
charge shall be payable by the holder of this Receipt, who shall pay the
amount thereof to the Depositary. Until such payment is made, registration
of transfer of this Receipt or any split-up or combination hereof may be
refused, any dividend or other distribution may be withheld and any part or
all of the Stock or other property (including Class A Common Stock or
securities received in connection with a conversion or redemption of Stock)
represented by the Depositary Shares evidenced by this Receipt may be sold
for the account of the holder hereof (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 to such tax or other governmental charge, the holder of this
Receipt remaining liable for any deficiency.
9. Amendment. The form of the Receipts and any provision of the 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. Every
holder of an outstanding Receipt at the time 90 days after such notice of
amendment shall have been given shall be deemed, by continuing to hold such
Receipt, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby.
10. Fees, Charges and Expenses. The Company will pay all fees,
charges and expenses of the Depositary, except for taxes (including
transfer taxes, if any) and other governmental charges and such charges as
are expressly provided in the Deposit Agreement to be at the expense of
persons depositing Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of this Receipt, and every
successive holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt (and to the Depositary Shares evidenced
hereby), when properly endorsed or accompanied by a property executed
instrument of transfer, is 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 hereof at such time as the absolute owner hereof for the
purpose of determining the person entitled to distribution of dividends or
other distributions or to any notice provided for in the Deposit Agreement
and for all other purposes.
12. Dividends and Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement,
distribute to record holders of Receipts such amounts of such sums 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.
13. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose name
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, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record
holders of Receipts in such manner as the Company shall instruct.
14. Notice of Dividends, Fixing of Record Date. 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 of the mandatory conversion of, or any election on the part of
the Company to call for 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 of
such meeting or to receive notice of such redemption.
15. 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 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 determined as provided in Paragraph 14 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
this 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 this 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 this Receipt, the
Depositary will abstain from voting to the extent of the Stock represented by
the Depositary Shares evidenced by this Receipt.
16. Reports, Inspection of Transfer Books. The Depositary shall make
available for inspection by holders of Receipts of the Corporate Office, the
New York City Office and at such other places as it may from time to time deem
advisable during normal business hours any reports and communications received
from the Company that are received by the Depositary as the holder of Stock.
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 will 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.
17. Liability of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's
Agent nor the Registrar nor the Company shall incur any liability to any
holder of this Receipt, if by reason of any provision of any present or
future law or regulation thereunder of any 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 the 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 this Receipt
(i) by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of the 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 the Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or
the Registrar, if such exercise or failure to exercise discretion is caused
by its negligence or bad faith.
18. Obligations of the Depositary, the Depositary's Agent, the
Registrar and the Company. The Company assumes no obligation and shall be
subject to no liability under the Deposit Agreement or this Receipt to the
holder hereof or other persons, except to perform in good faith such
obligations as are specifically set forth and undertaken by it to perform
in the Deposit Agreement. Each of the Depositary, the Depositary's Agents
and the Registrar assumes no obligation and shall be subject to no
liability under the Deposit Agreement or this Receipt to the holder hereof
or other persons, except to perform such obligations as are specifically
set forth and undertaken by it to perform in the 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 or Common Stock 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 will be liable for any action or 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 this Receipt or any other person
believed by it in good faith to be competent to give such advice or
information.
19. Termination of Deposit Agreement. Whenever so directed by the
Company, the Depositary will terminate the 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 the Deposit Agreement if at any time 90
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 of the Deposit Agreement. Upon the termination of the Deposit
Agreement, the Company shall be discharged from all obligations thereunder
except for its obligations to the Depositary, any Depositary's Agent and any
Registrar under Sections 5.07 and 5.08 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination of the
Deposit Agreement, the Depositary thereafter shall discontinue all functions
and be discharged from all obligations as provided in the Deposit Agreement,
except as specifically provided therein.
20. Governing Law. The Deposit Agreement and this Receipt and all
rights thereunder and hereunder and provisions thereof and hereof 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.
CONVERSION NOTICE
To Freeport-McMoRan Copper & Gold Inc.
The undersigned owner of the Depositary Shares evidenced by this
Receipt hereof irrevocably exercises the option to convert the shares of
Preferred Stock of Freeport-McMoRan Copper & Gold Inc. represented by such
Depositary Shares or the number of full shares represented by the number of
Depositary Shares set forth below, into shares of Class A Common Stock of
Freeport-McMoRan Copper & Gold Inc. in accordance with the terms of the
Certificate of Incorporation and the statement of designations, preferences
and relative rights of the Preferred Stock of Freeport-McMoRan Copper &
Gold Inc. and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares be
issued in the name of and delivered to the undersigned unless a different
name has been indicated below. If shares are to be issued in the name of
a person other than the undersigned, the undersigned will pay any
transfer taxes payable with respect thereto.
Dated:
Fill in for registration of shares:
____________________________________ _______________________________
(Name) Signature
Portion to be converted if less than all:
___________________________________ ________________Depositary Shares
(Street Address)
___________________________________ _________________________________
(City, State and Zip Code) Social Security or Other
Identification Number
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Receipt, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--_______Custodian______
TEN ENT__as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to Minors
JT TEN--as joint tenants with Act_________________________
right of survivorship (State)
and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
| |
| |
|____________________________________|________________________________
the within Receipts and all rights and interests represented by the
Depositary Shares evidenced thereby, and hereby irrevocably constitutes and
appoints __________________________________________________ his attorney,
to transfer the same on the books of the within named Depositary, with full
power of substitution in the premises.
Dated:_____________________ Signature:__________________________________
NOTE: The signature to this assign-
ment must correspond with the name
as written upon the face of the
Receipt in every particular, without
alteration or enlargement, or any
change whatever.
Exhibit 4.7
CERTIFICATE OF DESIGNATIONS
OF
GOLD-DENOMINATED PREFERRED STOCK
(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 700,000 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 Consent dated
July 21, 1993, and a Special Committee thereof,
pursuant to authority specifically granted to it by
such Board of Directors, acting by Unanimous Written
Consent dated August 5, 1993, duly adopted the
following resolutions authorizing the creation and
issuance of a series of Preferred Stock to be known as
"Gold-Denominated Preferred Stock."
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) 300,000 shares of
Preferred Stock of the Corporation are hereby
constituted as a series of Preferred Stock designated
as "Gold-Denominated Preferred Stock" (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 November 1, 1993 and ending
August 1, 2003 (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 August 1,
2003 (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, 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, 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.
(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 0.0175 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 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 November 1, 1993 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 Coverage Ratio (as
defined below) as of such Calculation Date. If the
Reserve Coverage Ratio, as shown on the Corporation
Certificate prepared with respect to any Calculation
Date is less than 5.0, 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 Dollar Equivalent Value of 2.0
ounces of gold per share of this Series plus accrued
and unpaid dividends (as hereinafter defined) through
the Purchase Date (as hereinafter defined), the
smallest number of shares of this Series (rounded to
the nearest 500 shares) such that, if all such shares
had been repurchased on the relevant Calculation Date,
the Reserve Coverage Ratio on that date would have
been greater than or equal to 5.0. If the Corporation
Certificate prepared with respect to any Calculation
Date shows that the Reserve Coverage Ratio is less
than 5.0, the Corporation shall include on such
Certificate its calculation of the number of shares of
this Series for which it is required to make an offer
(the "Offer Amount").
(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 by mailing a notice to all holders of
record of the shares of this Series setting forth (A)
that such notice is being given pursuant to a Reserve
Coverage Offer, (B) the Offer Amount, (C) the method
for determining the amount payable per share of this
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 electing to have shares of this
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 of this
Series 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
this Series tendered exceeds the Offer Amount, the
Corporation will select the shares of this 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 of this Series 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 this 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, 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 this 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 Coverage Ratio to fall below 5.0 unless,
immediately following consummation of such
transaction, the Company will have sufficient legally
available funds 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) "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
Coverage Ratio, as estimated by the Corporation, to
fall below 5.0.
(iii) The "Gold Amount" as of any
Calculation Date means the product of (x) 2.0 ounces
of gold and (y) the number of shares of this Series
issued and outstanding as of such Calculation Date
less the number of shares of this Series acquired by
the Corporation on or prior to the date of preparation
of a Corporation Certificate with respect to such
Calculation Date.
(iv) The "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 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 offer to
purchase shares of this Series due to a failure to
meet the minimum Reserve Coverage Ratio on any
Calculation Date, the date of commencement of such
Reserve Coverage Offer, (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.
(v) The "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.
(vi) The "Reserve Coverage Ratio" shall be
determined as of each Calculation Date by dividing (i)
the Reserve Amount as of such Calculation Date by (ii)
the Gold Amount as of such date.
5. Voting Rights. (a) Except for the
voting rights described below and except as otherwise
provided 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 and 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 as of this 10th day of
August, 1993.
FREEPORT-McMoRan COPPER & GOLD
INC.
By:
Name: Stephen M. Jones
Title: Vice President
(CORPORATE SEAL)
Attest:
By:
Name: Michael C. Kilanowski
Title: Secretary
Exhibit 4.8
FREEPORT-McMoRan COPPER & GOLD INC.
and
MELLON SECURITIES TRUST COMPANY,
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
____________
DEPOSIT AGREEMENT
____________
Dated as of August 12, 1993
__________________________________________________
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
Page
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 August 12,
1993 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, 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 A
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING ______________ (OF A) SHARE OF
(Preferred STOCK)
OF
FREEPORT-McMoRan COPPER & GOLD INC.
(Incorporated under the Laws of the State of Delaware)
No.
Mellon Securities Trust Company (the
"Depositary") hereby certifies that ______________ is
the registered owner of _______________ Depositary
Shares (the "Depositary Shares"), each Depositary
Share representing __________ of a share of (Preferred
Stock), $0.10 par value (the "Stock"), of Freeport-
McMoRan Copper & Gold Inc., a corporation duly
organized and existing under the laws of the State of
Delaware (the "Company"), deposited with the
Depositary and the same proportionate interest in any
and all other property received by the Depositary in
respect of such shares of Stock and held by the
Depositary under the Deposit Agreement (as defined
below). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share is
entitled, proportionately, to all the rights,
preferences and privileges of the Stock represented
thereby, including the dividend, conversion, exchange,
voting, liquidation and other rights contained in the
Certificate of Designations establishing the rights,
preferences, privileges and limitations of the Stock
(the "Certificate of Designations"), copies of which
are on file at the office of the Depositary at which
at any particular time its business in respect of
matters governed by the Deposit Agreement shall be
administered, which at the time of the execution of
the Deposit Agreement is located at
__________________________ (the "Corporate Office").
This Depositary Receipt ("Receipt") shall not
be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose
unless this Receipt shall have been executed manually
or, if a Registrar for the Receipts (other than the
Depositary) shall have been appointed, by facsimile by
the Depositary by the signature of a duly authorized
officer and, if executed by facsimile signature of the
Depositary, shall have been countersigned manually by
such Registrar by the signature of a duly authorized
officer.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE
VALIDITY OF ANY DEPOSITED STOCK. THE DEPOSITARY
ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE
TAKEN AS A STATEMENT OF THE COMPANY SUMMARIZING
CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS
EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE
DEPOSITARY MAKES NO WARRANTIES OR REPRESENTATIONS AS
TO THE VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY
STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER
THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS
TO THE VALIDITY OR SUFFICIENCY OF THE DEPOSIT
AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY SHARES OR
AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD
HOLDERS OF THE DEPOSITARY RECEIPTS IN AND TO THE
DEPOSITARY SHARES.
The Company will furnish to any holder of
this Receipt without charge, upon request addressed to
its executive office, a full statement of the
designation, relative rights, preferences and
limitations of the shares of each authorized class,
and of each class of preferred stock authorized to be
issued, so far as the same may have been fixed, and a
statement of the authority of the Board of Directors
of the Company to designate and fix the relative
rights, preferences and limitations of other classes.
This Receipt is continued on the reverse
hereof and the additional provisions therein set forth
for all purposes have the same effect as if set forth
at this place.
Dated:
MELLON SECURITIES TRUST COMPANY,
as Depositary and Registrar
By:____________________________
Authorized Officer
Further Conditions and Agreements Forming Part of this
Receipt Appear on the Reverse Side.
(FORM OF REVERSE
OF DEPOSITARY RECEIPT)
1. The Deposit Agreement. Depositary
Receipts (the "Receipts"), of which this Receipt is
one, are made available upon the terms and conditions
set forth in the Deposit Agreement, dated as of
___________ (the "Deposit Agreement"), among the
Company, the Depositary and all holders from time to
time of Receipts. The Deposit Agreement (copies of
which are on file at the Corporate Office, the office
maintained by the Depositary in the Borough of
Manhattan, the City of New York which at the time of
the execution of the Deposit Agreement is located at
__________________ (the "New York Office") and at the
office of any agent of the Depositary) sets forth the
rights of holders of Receipts and the rights and
duties of the Depositary. The statements made on the
face and the reverse of this Receipt are summaries of
certain provisions of the Deposit Agreement and are
subject to the detailed provisions thereof, to which
reference is hereby made. In the event of any
conflict between the provisions of this Receipt and
the provisions of the Deposit Agreement, the
provisions of the Deposit Agreement will govern.
2. Definitions. Unless otherwise expressly
herein provided, all defined terms used herein shall
have the meanings ascribed thereto in the Deposit
Agreement.
3. Redemption by the Company; Repurchase by
the Company. 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 or redemption 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, and the proposed simultaneous,
redemption of 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 such holders as the same
appear on the records of the Depositary. 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. 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 and published 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 above), 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 shall, to the extent of such
Depositary Shares, cease and terminate.
Whenever the Company shall be required to
make a repurchase of Depositary Shares 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 and conditions of the
repurchase offer, as provided by the Company, to the
record holders of the Receipts evidencing the
Depositary Shares to be repurchased by the Company, at
the addresses of such holders as the same appear on
the records of the Depositary. The Depositary shall,
thereafter, collect any notices, guarantees and
Receipts evidencing the Depositary Shares from the
holders in the manner provided for in the notice sent
to the holders from the Company. In case the
aggregate number of Depositary Shares exceeds the
amount the Company is required to repurchase, the
Depositary Shares to be repurchased shall be selected
by the Depositary on a pro rata basis at the direction
of the Company. The foregoing is subject further to
the terms and conditions of the Certificate of
Designations.
4. Withdrawal of Stock Not Permitted.
Holders of Receipts are not entitled to receive any of
the shares of Stock represented by such Receipts.
5. Transfers, Split-ups, Combinations.
Subject to Paragraphs 6, 7 and 8 below, this Receipt
is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the
Corporate Office or the New York Office, or at such
other offices as the Depositary may designate,
properly endorsed or accompanied by a properly
executed instrument of transfer, and upon such
transfer the Depositary shall sign and deliver a
Receipt or Receipts to or upon the order of the person
entitled thereto, all as provided in and subject to
the Deposit Agreement. This Receipt may be split into
other Receipts or combined with other Receipts into
one Receipt 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.
6. Conditions to Signing and Delivery,
Transfer, etc., of Receipts. Prior to the execution
and delivery, registration of transfer, split-up,
combination, surrender or exchange of this Receipt,
the delivery of any distribution hereon, 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 Stock being deposited or withdrawn or with respect
to other securities or 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
Deposit Agreement. Any person presenting Stock for
deposit, or any holder of this Receipt, may be
required to file such proof of 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
this Receipt, the registration of transfer,
redemption, or exchange of this Receipt, the
withdrawal of the Stock represented by the Depositary
Shares evidenced by this 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.
7. Suspension of Delivery, Transfer, etc.
The registration of transfer, split-up, combination,
surrender or exchange of this Receipt 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 the Deposit Agreement, or (iii) with the
approval of the Company, for any other reason. The
Depositary shall not be required 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.
8. 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) this Receipt, (ii) the Depositary
Shares evidenced by this 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, of the
Deposit Agreement, such tax (including transfer,
issuance or acquisition taxes, if any) or governmental
charge shall be payable by the holder of this Receipt,
who shall pay the amount thereof to the Depositary.
Until such payment is made, registration of transfer
of this Receipt or any split-up or combination hereof
or any withdrawal of the Stock or money or other
property, if any, represented by the Depositary Shares
evidenced by this 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 this Receipt may be
sold for the account of the holder hereof (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 this Receipt
remaining liable for any deficiency.
9. Amendment. The form of the Receipts and
any provision of the 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
Receipt 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. Every
holder of an outstanding Receipt at the time 90 days
after such notice of amendment shall have been given
shall be deemed, by continuing to hold such Receipt,
to consent and agree to such amendment and to be bound
by the Deposit Agreement as amended thereby. In no
event shall any amendment impair the right, subject to
the provisions of Paragraphs 3, 4 6, 7, and 8 hereof
and of Sections 2.03, 2.06 and 2.07 and Article III of
the Deposit Agreement, of the owner of the Depositary
Shares evidenced by this Receipt to surrender this
Receipt 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.
10. Fees, Charges and Expenses. The Company
will pay all fees, charges and expenses of the
Depositary, except for taxes (including transfer
taxes, if any) and other governmental charges and such
charges as are expressly provided in the Deposit
Agreement to be at the expense of persons depositing
Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of
this Receipt, and every successive holder hereof by
accepting or holding the same consents and agrees,
that title to this Receipt (and to the Depositary
Shares evidenced hereby), when properly endorsed or
accompanied by a properly executed instrument of
transfer, is 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 hereof at such time as the absolute
owner hereof for the purpose of determining the person
entitled to distribution of dividends or other
distributions or to any notice provided for in the
Deposit Agreement and for all other purposes.
12. Dividends and Distributions. Whenever
the Depositary shall receive any cash dividend or
other cash distribution on the Stock, the Depositary
shall, subject to the provisions of the Deposit
Agreement, distribute to record holders of Receipts
such amounts of such sums 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.
13. Subscription Rights, Preferences or
Privileges. If the Company shall at any time offer or
cause to be offered to the persons in whose name 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,
subject to the provisions of the Deposit Agreement, be
made available by the Depositary to the record holders
of Receipts in such manner as the Company shall
instruct.
14. Notice of Dividends, Fixing of Record
Date. 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 of
the mandatory conversion of, or any election on the
part of the Company to call for redemption or exchange
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 of such meeting or to receive notice
of such conversion, exchange or redemption.
15. 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 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
determined as provided in Paragraph 14 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 this 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 this 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
this Receipt, the Depositary will abstain from voting
to the extent of the Stock represented by the
Depositary Shares evidenced by this Receipt.
16. Reports, Inspection of Transfer Books.
The Depositary shall make available for inspection by
holders of Receipts at the Corporate Office, the New
York Office and at such other places as it may from
time to time deem advisable during normal business
hours any reports and communications received from the
Company that are received by the Depositary as the
holder of Stock. 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 will 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.
17. Liability of the Depositary, the
Depositary's Agents, the Registrar and the Company.
Neither the Depositary nor any Depositary's Agent nor
the Registrar nor the Company shall incur any
liability to any holder of this Receipt, if by reason
of any provision of any present or future law or
regulation thereunder of any 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 the 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 this Receipt (i) by
reason of any nonperformance or delay, caused as
aforesaid, in the performance of any act or thing that
the terms of the 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 the Deposit Agreement except, in the
case of the Depositary, any Depositary's Agent or the
Registrar, if such exercise or failure to exercise
discretion is caused by its negligence or bad faith.
18. Obligations of the Depositary, the
Depositary's Agent, the Registrar and the Company.
The Company assumes no obligation and shall be subject
to no liability under the Deposit Agreement or this
Receipt to the holder hereof or other persons, except
to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform
in the Deposit Agreement. Each of the Depositary, the
Depositary's Agents and the Registrar assumes no
obligation and shall be subject to no liability under
the Deposit Agreement or this Receipt to the holder
hereof or other persons, except to perform such
obligations as are specifically set forth and
undertaken by it to perform in the 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 or Common Stock
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 will be liable
for any action or 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 this Receipt or any other person
believed by it in good faith to be competent to give
such advice or information.
19 Termination of Deposit Agreement.
Whenever so directed by the Company, the Depositary
will terminate the 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 the Deposit
Agreement if at any time 90 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 of the Deposit Agreement. Upon the termination
of the Deposit Agreement, the Company shall be
discharged from all obligations thereunder except for
its obligations to the Depositary, any Depositary's
Agent and any Registrar under Sections 5.07 and 5.08
of the Deposit Agreement.
If any Receipts remain outstanding after the
date of termination of the Deposit Agreement, the
Depositary thereafter shall discontinue all functions
and be discharged from all obligations as provided in
the Deposit Agreement, except as specifically provided
therein.
20. Governing Law. The Deposit Agreement
and this Receipt and all rights thereunder and
hereunder and provisions thereof and hereof 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.
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto the
within Receipt and all rights and interests
represented by the Depositary Shares evidenced
thereby, and hereby irrevocably constitutes and
appoints his attorney, to transfer
the same on the books of the within-named Depositary,
with full power of substitution in the premises.
Dated:
Signature:____________________________
NOTE: The signature to this
assignment must correspond
with the name as written
upon the face of the Receipt
in every particular, without
alteration or enlargement, or
any change whatever.
Exhibit 4.9
NOT MORE DEPOSITARY RECEIPT NOT MORE
MORE MORE
THAN 100,000 FOR DEPOSITARY SHARES, THAN 100,000
SHARES EACH REPRESENTING SHARES
0.05 OF A SHARE OF
NUMBER GOLD-DENOMINATED
FCXG PREFERRED STOCK DEPOSITARY SHARES
OF
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 35671D 60 0
FREEPORT-MCMORAN COPPER & GOLD INC.
(incorporated under the laws of the State of Delaware)
Mellon Securities Trust Company (the "Depositary") hereby
certifies that
is the registered owner of Depositary Shares
(the "Depositary Shares"), each Depositary Share representing 0.05
of a share of Gold-Denominated Preferred Stock, $0.10 par value
(the "Stock"), of Freeport-McMoRan Copper & Gold Inc., a corporation
duly organized and existing under the laws of the State of
Delaware (the "Company"), deposited with the Depositary and the
same proportionate interest in any and all other property received
by the Depositary in respect of such shares of Stock and held by
the Depositary under the Deposit Agreement (as defined below).
Subject to the terms of the Deposit Agreement, each owner of a Depositary
Share is entitled, proportionately, to all the rights, preferences
and privileges of the Stock represented thereby, including the
dividend, redemption, voting, liquidation and other rights contained
in the Certificate of Designations establishing the rights,
preferences, privileges and limitations of the Stock (the
"Certificate of Designations"), copies of which are on file at the office
of the Depositary at which at any particular time its business in respect
of matters governed by the Deposit Agreement shall be administered, which
at the time of the execution of the Deposit Agreement is located at the
Depositary's corporate trust office in the Borough of Manhattan in the City
of New York (the "New York City Office").
This Depositary Receipt ("Receipt") shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any
purpose unless this Receipt shall have been executed manually or, if a
Registrar for the Receipts (other than the Depositary) shall have been
appointed, by facsimile by the Depositary by the signature of a duly
authorized officer and, if executed by facsimile signature of the
Depositary, shall have been countersigned manually by such Registrar by the
signature of a duly authorized officer.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED
STOCK. THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE
DESCRIPTION SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF
THE COMPANY SUMMARIZING CERTAIN PROVISIONS OF THE DEPOSIT AGREEMENT.
UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT AGREEMENT, THE DEPOSITARY MAKES
NO WARRANTIES OR REPRESENTATIONS AS TO THE VALIDITY, GENUINENESS OR
SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE DEPOSITARY UNDER
THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE VALIDITY OR
SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE DEPOSITARY
SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF THE
DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES.
The Company will furnish to any holder of this Receipt, without
charge, upon request addressed to its executive office, a full statement of
the designation, relative rights, preferences and limitations of the shares
of each authorized class, and of each class of preferred stock authorized
to be issued, so far as the same may have been fixed, and a statement of
the authority of the Board of Directors of the Company to designate and by
the relative rights, preferences and limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if
set forth at this place.
Dated: MELLON SECURITIES TRUST COMPANY,
as Depositary, Transfer Agent and Registrar
By:
Authorized Officer
FURTHER CONDITIONS AND AGREEMENTS
FORMING PART OF THIS RECEIPT
1. The Deposit Agreement. Depositary Receipts (the "Receipts"), of
which this Receipt is one, are made available upon the terms and conditions
set forth in the Deposit Agreement, dated as of August 12, 1993 (the
"Deposit Agreement"), among the Company, the Depositary and all holders
from time to time of Receipts. The Deposit Agreement (copies of which are
on file at the office of the Depositary in Ridgefield Park, New Jersey,
located at 85 Challenger Road (the "Corporate Office"), in the New York
City Office and at the office of any agent of the Depositary) sets forth
the rights of certain provisions of the Deposit Agreement and are subject
to the detailed provisions thereof, to which reference is hereby made. In
the event of any conflict between the provisions of this Receipt and the
provisions of the Deposit Agreement, the provisions of the Deposit
Agreement will govern.
2. Definitions. Unless otherwise expressly herein provided, all
defined terms used herein shall have the meanings ascribed thereto in the
Deposit Agreement.
3. Redemption by the Company; Repurchase by the Company. Whenever
the Company shall redeem shares of Stock in accordance with the Certificate
of Designation, 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 and the simultaneous redemption of the Deposit 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 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. 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. 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 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 above),
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, if any, payable
upon redemption upon surrender of such Receipts) shall, to the extent of
such Depositary Shares, cease and terminate. The foregoing is subject
further to the terms and conditions of the Certificate of Designations.
Whenever the Company shall be required to make a repurchase of
Depositary Shares 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
and conditions of the repurchase offer, as provided by the Company, to the
record holders of the Receipts evidencing the Depositary Shares to be
repurchased by the Company, at the addresses of such holders as the same
appear on the records of the Depositary. The Depositary shall, thereafter,
collect any notices, guarantees and Receipts evidencing the Depositary
Shares from the holders in the manner provided in the notice sent to the
holders from the Company. In case the aggregate number of Depositary
Shares exceeds the amount the Company is required to repurchase, the
Depositary Shares to be repurchased shall be selected by the Depositary on
a pro rata basis at the direction of the Company. The foregoing is subject
further to the terms and conditions of the Certificate of Designations.
4. Withdrawal of Stock not Permitted. Holders of Receipts are not
entitled to receive any of the shares of Stock represented by such
Receipts.
5. Transfers, Split-ups, Combinations. Subject to Paragraphs 6, 7
and 8 below, this Receipt is transferable on the books of the Depositary
upon surrender of this Receipt to the Depositary at the Corporate Office or
the New York Office, or at such other offices as the Depositary shall sign
and deliver a Receipt or Receipts to or upon the order of the person
entitled thereto, all as provided in and subject to the Deposit Agreement.
This Receipt may be split into other Receipts or combined with other
Receipts into one Receipt evidencing the same aggregate umber of Depositary
Shares evidenced by 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.
6. Conditions to Signing and Delivery, Transfer, etc. of Receipts.
Prior to the execution and delivery, registration of transfer, split-up,
combination, surrender or exchange of this Receipt or the delivery of any
distribution hereon, 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 Stock being deposited or withdrawn or with
respect to other securities or 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 Deposit Agreement. Any person presenting Stock for
deposit, or any holder of this Receipt, may be required to file such proof
of information, to execute such certificates and to make such
representations and warranties of this Receipt, the registration of
transfer, redemption or conversion of this 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.
7. Suspension of Delivery, Transfer, etc. The registration of
transfer, split-up, combination, surrender or exchange of this Receipt 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
the Deposit Agreement, or (iii) with the approval of the Company, for any
other reason. 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, subject to conversion
except as provided in the last sentence of Paragraph 3.
8. 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) this Receipt, (ii) the
Depositary Shares evidenced by this 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 of the Deposit Agreement, such tax (including transfer,
issuance or acquisition taxes, if any, or governmental charge shall
be payable by the holder of this Receipt, who shall pay the amount
thereof to the Depositary. Until such payment is made, registration
or transfer of this Receipt or any split-up
9. Amendment. The form of the Receipts and any provision of the
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 or 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
recorded 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. Every holder of an outstanding Receipt at the time 90
days after such notice of amendment shall have been given shall be deemed,
by continuing to hold such Receipt, to consent and agree to such amendment
and to be bound by the Deposit Agreement as amended thereby.
10. Fees, Charges and Expenses. The Company will pay all fees,
charges and expenses of the Depositary, except for taxes (including
transfer taxes, if any) and other governmental charges and such charges as
are expressly provided in the Deposit Agreement to be at the expense of
persons depositing Stock, holders of Receipts or other persons.
11. Title to Receipts. It is a condition of this Receipt, and every
successive holder hereof by accepting or holding the same consents and
agrees, that title to this Receipt (and to the Depositary Shares evidenced
hereby), when properly endorsed or accompanied by a property executed
instrument of transfer, is 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 hereof at such time as the absolute
owner hereof for the for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided
for in the Deposit Agreement and for all other purposes.
12. Dividends and Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to the provisions of the Deposit Agreement,
distribute to record holders of Receipts such amounts of such sums 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 once 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.
13. Subscription Rights, Preferences or Privileges. If the Company
shall at any time offer or cause to be offered to the persons in whose name
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, subject to the provisions of the
Deposit Agreement, be made available by the Depositary to the record holders
of Receipts in such manner as the Company shall instruct.
14. Notice of Dividends, Fixing of Record Date. 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 of the mandatory conversion of, or any election on the part of
the Company to call for 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 of
such meeting or to receive note of such redemption.
15. 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 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 determined as provided in Paragraph 14
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 this 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 this
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 this Receipt, the Depositary will abstain
from voting to the extent of the Stock represented by the Depositary Shares
evidenced by this Receipt.
16. Reports, Inspection of Transfer Books. The Depositary shall make
available for inspection by holders of Receipts of the Corporate Office,
the New York City Office and at such other places as it may from time to
time deem advisable during normal business hours any reports and
communications received from the Company that are received by the
Depositary as the holder of Stock. 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
will 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 persons, interest as an owner of Depositary Shares.
17. Liability of the Depositary, the Depositary's Agents, the
Registrar and the Company. Neither the Depositary nor any Depositary's
Agent nor the Registrar nor the Company shall incur any liability to any
holder of this Receipt, if by reason of any provision of any present or
future law or regulation thereunder of any 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 the 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 this Receipt
(i) by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of the 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 the Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or
the Registrar, if such exercise or failure to exercise discretion is caused
by its negligence or bad faith.
18. Obligations of the Depositary, the Depositary's Agent, the
Registrar and the Company. The Company assumes no obligation and shall be
subject to no liability under the Deposit Agreement or this Receipt to the
holder hereof or other persons, except to perform in good faith such
obligations as are specifically set forth and undertaken by it to perform
in the Deposit Agreement. Each of the Depositary, the Depositary's Agents
and the Registrar assumes no obligations and shall be subject to no
liability under the Deposit Agreement or this Receipt to the holder hereof
or other persons except to perform such obligations as are specifically set
forth and undertaken by it to perform in the 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 or Common Stock 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 will be liable for any action or 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 this Receipt or any
other person believed by it in good faith to be competent to give such
advice or information.
19. Termination of Deposit Agreement. Whenever so directed by the
Company, the Depositary will terminate the 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 the 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 of the Deposit
Agreement. Upon the termination of the Deposit Agreement, the Company
shall be discharged from all obligations thereunder except for its
obligations to the Depositary, any Depositary's Agent and any Registrar
under Sections 5.07 and 5.08 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination of
the Deposit Agreement, the Depositary thereafter shall discontinue all
functions and be discharged from all obligations as provided in the Deposit
Agreement, except as specifically provided therein.
20. Governing Law. The Deposit Agreement and its Receipts and the
rights thereunder and hereunder and provisions thereof and hereof 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.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Receipt, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT--______Custodian______
TEN ENT - as tenants by the (Cust) (Minor)
entireties
JT TEN - as joint tenants with under Uniform Gifts to Minors
right of survivorship Act__________________________
and not as tenants in (State)
common
Additional abbreviations may be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
Please insert Social Security or other
identifying number of Assignee
______________________________________
| |
| |
|____________________________________|__________________________________
the within Receipt and all rights and interests represented by the
Depositary Shares evidenced thereby, and hereby irrevocably
constitutes and appoints ____________________________________________his
attorney, to transfer the same on the books of the within named
Depositary, with full power of substitution in the premises.
Dated:__________________________________________________________________
Signature:______________________________________________________________
NOTE: The signature to this assignment must correspond with the
name as written upon the face of the Receipt in every particular,
without alteration or enlargement, or any change whatever.
Exhibit 4.10
EXECUTION COPY
============================================================
P.T. FREEPORT INDONESIA COMPANY
_______________________
$550,000,000
AMENDED CREDIT AGREEMENT
Dated as of June 1, 1993
with
CERTAIN BANKS,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
(for purposes of Article VIII only),
as FI Trustee
and
CHEMICAL BANK,
as Agent
============================================================
TABLE OF CONTENTS
Page
Parties and Recitals ................................ 1
ARTICLE I
Definitions
Section 1.1. Definitions .......................... 1
Section 1.2. Accounting Terms ..................... 25
Section 1.3. Section, Article, Exhibit and
Schedule References ................ 26
ARTICLE II
[Intentionally left blank]
ARTICLE III
The Loans
Section 3.1. [Intentionally left blank] ........... 26
Section 3.2. Revolving Credit Facility ............ 26
Section 3.3. Loans ................................ 26
Section 3.4. Notice of Loans ...................... 27
Section 3.5. Promissory Notes ..................... 28
Section 3.6. Interest on Loans .................... 29
Section 3.7. Fees ................................. 29
Section 3.8. Maturity and Reduction of
Commitments ........................ 30
Section 3.9. Interest on Overdue Amounts;
Alternative Rate of Interest ....... 31
Section 3.10. Prepayment of Loans .................. 33
Section 3.11. Continuation and Conversion of
Loans ............................. 34
Section 3.12. Reserve Requirements; Change in
Circumstances ...................... 36
Section 3.13. Change in Legality ................... 40
Section 3.14. Indemnity ............................ 41
Section 3.15. Pro Rata Treatment ................... 42
Section 3.16. Sharing of Setoffs ................... 42
Section 3.17. Payments ............................. 43
Section 3.18. U.S. Taxes ........................... 44
Section 3.19. Indonesian Taxes ..................... 47
ARTICLE IV
Representations and Warranties
Section 4.1. Representations and Warranties........ 48
(a) Organization, Powers ............ 48
(b) Authorization ................... 49
(c) Governmental Approval ........... 49
(d) Enforceability .................. 50
(e) Financial Statements ............ 50
(f) Litigation; Compliance with
Laws; etc. .................... 51
(g) Title, etc. ..................... 52
(h) Federal Reserve Regulations;
Use of Proceeds ............... 53
(i) Taxes ........................... 54
(j) Employee Benefit Plans .......... 54
(k) Investment Company Act .......... 54
(l) Public Utility Holding Company
Act ........................... 55
(m) Subsidiaries .................... 55
(n) Assigned Agreements ............. 55
(o) FI Security Documents ........... 55
(p) No Material Misstatements ....... 55
ARTICLE V
Covenants
Section 5.1. Affirmative Covenants of FTX ......... 56
(a) Financial Statements, etc. ...... 56
(b) Taxes and Claims ................ 58
(c) Maintenance of Existence;
Conduct of Business ........... 58
(d) Compliance with Applicable Laws . 58
(e) Litigation ...................... 58
(f) ERISA ........................... 59
(g) [Intentionally left blank] ...... 59
(h) Security ........................ 59
(i) Insurance ....................... 60
(j) Access to Premises and Records .. 61
(k) FI Security Arrangements ........ 61
(l) Protection of Contract Rights ... 61
(m) Source of Interest .............. 62
(n) Further Assurances .............. 62
(o) Covenants regarding FI
and FCX ....................... 63
Section 5.2. Negative Covenants of FTX ............ 63
(a) Conflicting Agreements .......... 63
(b) Borrowing Base Limits ........... 63
(c) Consolidation or Merger;
Disposition of Assets and
Capital Stock ................. 63
(d) Liens ........................... 65
(e) Current Ratios .................. 67
(f) Fixed Charge Ratios ............. 68
(g) Debt ............................ 68
(h) [Intentionally left blank] ...... 71
(i) Convertible Debt Payments ....... 71
(j) Ownership of Subsidiaries ....... 71
(k) Fiscal Year ..................... 72
(l) Investments in Nonrestricted
Subsidiaries and Persons Not
Subsidiaries .................. 72
(m) Federal Reserve Regulations ..... 73
(n) Certain Debt Agreements ......... 73
(o) Investments in the Major
Subsidiaries .................. 73
(p) Investments in FCX .............. 74
(q) Equity Payments ................. 74
(r) Covenants Regarding IMC-Agrico .. 76
(s) Covenants Regarding ALatief-FI .. 77
Section 5.3. Additional Covenants of
FI and FCX ......................... 77
ARTICLE VI
Conditions of Credit
Section 6.1. Conditions Precedent to
Each Credit Event ................... 78
Section 6.2. Representations and Warranties with
Respect to Credit Events ............ 78
ARTICLE VII
Events of Default
Section 7.1. Events of Default .................... 79
ARTICLE VIII
The Agent and the FI Trustee
Section 8.1. The Agent and the FI Trustee ......... 83
ARTICLE IX
Guarantees
Section 9.1. Guarantee ............................ 88
ARTICLE X
Miscellaneous
Section 10.1. Notices ............................. 90
Section 10.2. Survival of Agreement ............... 90
Section 10.3. Successors and Assigns;
Participations; Purchasing Banks .. 91
Section 10.4. Expenses of the Banks; Indemnity .... 96
Section 10.5. Right of Setoff ..................... 98
Section 10.6. Applicable Law ...................... 98
Section 10.7. Waivers; Amendments ................. 98
Section 10.8. Severability ........................ 100
Section 10.9. Counterparts ........................ 100
Section 10.10. Headings ............................ 100
Section 10.11. Entire Agreement .................... 100
Section 10.12. Amendment Closing Date .............. 101
Section 10.13. Waiver of Jury Trial, etc. .......... 101
Section 10.14. Interest Rate Limitation ............ 101
Section 10.15. Jurisdiction; Consent to Service of
Process ........................... 101
Section 10.16. Confidentiality ...................... 102
Section 10.17. Judgment Currency..................... 103
Schedule I Subsidiaries
Schedule II-1 Applicable Margin for Loans Prior to and
Including the Conversion Date
Schedule II-2 Applicable Margin for Loans After the
Conversion Date
Schedule III Commitments of the Banks
Schedule 4.1(c) Governmental Approvals
Schedule 4.1(n) Assigned Agreements
Schedule 5.2(d) Deemed Leases
Exhibit A Terms of Subordination
Exhibit B Form of Borrowing Confirmation for Loans
Exhibit C Form of Promissory Note
Exhibit D Form of Commitment Transfer Supplement
CREDIT AGREEMENT entered into as of
October 27, 1989, as amended through June 1,
1993, among P.T. FREEPORT INDONESIA COMPANY,
a limited liability company organized under
the laws of Indonesia and also domesticated
in Delaware ("FI"), FREEPORT-McMoRan INC., a
Delaware corporation ("FTX"), FREEPORT McMoRan
COPPER & GOLD INC., a Delaware
corporation ("FCX"), the undersigned banks
(collectively, the "Banks"), MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking
corporation (for purposes of Article VIII
hereof only), as trustee for the Banks under
the FI Trust Agreement and, in such capacity,
as security agent for the Banks under the FI
Security Documents (as herein defined) (in
such capacity, the "FI Trustee") and CHEMICAL
BANK, a New York banking corporation, as
agent for the Banks (in such capacity, the
"Agent").
FI has requested the Banks to extend credit to FI
in order to enable it to borrow on a revolving credit basis
at any time and from time to time prior to the Maturity Date
(as herein defined). The aggregate principal amount of all
revolving credit loans at any time outstanding hereunder
shall not exceed $550,000,000. The proceeds of such
borrowings are to be used for general corporate purposes,
including, without limitation, the financing of
acquisitions.
The Banks are willing to make loans to FI upon the
terms and subject to the conditions hereinafter set forth,
including the guarantee by FTX and FCX (the "Guarantors") of
the loans to FI.
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1. Definitions. As used in this Agreement,
the following terms have the meanings indicated (any
term defined in this Article I or elsewhere in this Agreement
in the singular and used in this Agreement in the
plural shall include the plural, and vice versa):
"Adjusted CD Rate" means, with respect to any CD
Rate Loan for any Interest Period, an interest rate per
annum (rounded upwards, if not already a whole multiple of
1/100 of 1%, to the next higher 1/100 of 1%) equal to the
sum of (a) a rate per annum equal to the product of (i) the
Fixed CD Rate in effect for such Interest Period and
(ii) Statutory Reserves, plus (b) the Assessment Rate. For
purposes hereof, the term "Fixed CD Rate" shall mean the
rate of interest determined by the Agent to be the
arithmetic average (rounded upwards, if not already a whole
multiple of 1/100 of 1%, to the next higher 1/100 of 1%) of
the respective rates per annum notified to the Agent by the
Reference Banks as the prevailing rate per annum bid at or
about 10:00 a.m., New York City time, on the first Business
Day of the Interest Period applicable to such CD Rate Loan
by three New York City negotiable certificate of deposit
dealers of recognized standing selected by each such
Reference Bank for the purchase at face value from such
Reference Bank of negotiable certificates of deposit of
major United States money center banks in a principal amount
approximately equal to such Reference Bank's portion of such
CD Rate Loan and with a maturity comparable to such Interest
Period.
"ALatief" means P.T. ALatief Nusakarya
Corporation, an Indonesian limited liability company.
"ALatief-FI" means the joint venture company to be
organized under the laws of Indonesia by FI and ALatief
pursuant to the ALatief-FI Joint Venture Agreement.
"ALatief-FI Joint Venture Agreement" means the
Joint Venture Agreement made and entered into on March 11,
1993, between FI and ALatief, as such agreement may be
amended as permitted by Section 5.2(s)(ii) and in effect
from time to time.
"ALatief-FI Transfer" means the transfer by FI of
the non-mining infrastructure facilities, as described in
the ALatief-FI Joint Venture Agreement, to ALatief-FI.
"Alternate Base Rate" means for any day, a rate
per annum (rounded upwards, if not already a whole multiple
of 1/100 of 1%, to the next higher 1/100 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day,
(b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect for such day
plus 1/2 of 1%. For purposes hereof, the term "Prime Rate"
shall mean the rate of interest per annum announced by
Chemical Bank from time to time as its prime rate in effect
at its principal office in the City of New York; each change
in the Prime Rate shall be effective on the date such change
is publicly announced as being effective. "Base CD Rate"
means the sum of (x) the product of (i) the Three-Month
Secondary CD Rate and (ii) Statutory Reserves and (y) the
Assessment Rate. "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of
New York (which rate will, under the current practices of
the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of
major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day
(or, if such day shall not be a Business Day, on the next
preceding Business Day) by Chemical Bank from three New York
City negotiable certificate of deposit dealers of recognized
standing selected by it. "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by Chemical Bank from three Federal funds brokers of
recognized standing selected by it. If for any reason
Chemical Bank shall have determined (which determination
shall be conclusive absent manifest error) that it is unable
to ascertain the Base CD Rate or the Federal Funds Effective
Rate or both for any reason, including the inability or
failure of Chemical Bank to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate
shall be determined without regard to clause (b) or (c), or
both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate, respectively.
"Amendment Agreement" means the Second Amendment
dated as of June 1, 1993, to the Credit Agreement dated as
of October 27, 1989, as previously amended by the Amendment
thereto dated as of December 20, 1991, among FI, the
Guarantors, certain banks, the FI Trustee, the Agent, The
Fuji Bank, Limited and Morgan Guaranty Trust Company of New
York, as outgoing co-agents, and Morgan Guaranty Trust
Company of New York, as outgoing agent for the Banks.
"Amendment Closing Date" has the meaning assigned
to such term in Section 2(b) of the Amendment Agreement.
"Applicable CD Rate" means on a per annum basis,
in respect of any Loan, for each day during the Interest
Period for such Loan, the sum of (i) the Adjusted CD Rate as
determined by the Agent plus (ii) the Applicable Margin.
"Applicable LIBO Rate" means on a per annum basis,
in respect of any Loan, for each day during the Interest
Period for such Loan, the sum of (i) the LIBO Rate as
determined by the Agent plus (ii) the Applicable Margin.
"Applicable Margin" means, during each period set
forth in Section 3.6(d), the rate per annum set forth
opposite the applicable condition on Schedule II hereto for
each type of Loan listed thereon.
"Applicable Percentage" of any Bank means the
percentage set opposite such Bank's name on Schedule III
hereto.
"Applicable Reference Rate" means on a per annum
basis in respect of any Reference Rate Loan, for any day,
the sum of the Alternate Base Rate, plus the Applicable
Margin.
"Assessment Rate" means with respect to each day
during an Interest Period, the net annual assessment rate
(rounded upwards, if not already a whole multiple of 1/100
of 1%, to the next highest whole multiple of 1/100 of 1%)
determined by the Agent to be payable to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for FDIC's
insuring time deposits made in Dollars at offices of
Chemical Bank in the United States as of the day two
Business Days prior to the first day of such Interest
Period.
"Assigned Agreements" means the Contract of Work
and the Concentrate Sales Agreements.
"Assignment Agreement" means the Amended and
Restated Pledge and Assignment and General Assignment of
Accounts Receivable dated as of October 27, 1989, between FI
and the FI Trustee, as such agreement may be further amended
and in effect from time to time.
"Available Borrowing Base" has the meaning
assigned to such term in Article I of the FTX Credit
Agreement.
"Bank" means each bank signatory hereto and its
successors and permitted assigns under Section 10.3(d).
"Board" means the Board of Governors of the
Federal Reserve System of the United States.
"Borrowing Base" has the meaning assigned to such
term in Article I of the FTX Credit Agreement.
"Borrowing Base Bank" means each FTX Lender and,
until such time as the FM Lenders shall by their written
consent release all recourse under the FM Credit Agreement
and the related documents against FTX, each FM Lender.
"Borrowing Base Certificate" has the meaning
assigned to such term in Article I of the FTX Credit
Agreement.
"Borrowing Base Debt" has the meaning assigned to
such term in Article I of the FTX Credit Agreement.
"Borrowing Base Factors" has the meaning assigned
to such term in Section 2.1 of the FTX Credit Agreement.
"Borrowing Date" means, with respect to any Loan,
the date on which such Loan is disbursed.
"Business Day" means a day on which the Banks are
each open for business at their respective Domestic Offices;
provided that when the term "Business Day" is used with
respect to LIBO Rate Loans, such term shall mean a day on
which the Banks are each also open for business at their
respective LIBOR Offices.
"Capital Interest" has the meaning assigned to
such term in Section 4.01 of the IMC-Agrico Partnership
Agreement.
"Capitalized Lease Obligation" means the obligation
of any Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use)
real and/or personal property which obligation is, or in
accordance with GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting
Standards Board) is required to be, classified and accounted
for as a capital lease on a balance sheet of such Person
under GAAP, and for purposes of this Agreement the amount of
such obligation shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Flow Ratio" means, for purposes of
Schedules II-1 and II-2 hereto, at the end of any fiscal
quarter, the cumulative sum, for the four consecutive fiscal
quarters ending with such quarter, of FTX's (a) Consolidated
Cash Flow, minus interest expense and capitalized interest
paid or accrued on Debt and Corporate Group Loans and minus
extraordinary or unusual nonrecurring cash items included in
Consolidated Cash Flow, divided by (b) the aggregate
principal amount of all Debt and Corporate Group Loans
outstanding at the end of such fiscal quarter.
"CD Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable CD Rate.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Agent" means Chemical Bank in its
capacity as Collateral Agent for the Lenders (as defined in
the FTX Intercreditor Agreement) under the FTX
Intercreditor Agreement.
"Commitment" means, with respect to each Bank, the
Commitment of such Bank hereunder as set forth on Schedule
III hereto, as the same may be permanently terminated or
reduced from time to time pursuant to Section 3.8. The
Commitment of each Bank shall automatically and permanently
terminate on the Maturity Date.
"Commitment Fee" has the meaning assigned to such
term in Section 3.7(a).
"Commitment Period" means the period commencing
with and including the Original Execution Date and ending on
but not including the Maturity Date.
"Commitment Transfer Supplement" means a
Commitment Transfer Supplement, substantially in the form of
Exhibit D.
"Concentrate Sales Agreements" means all contracts
and agreements with respect to the sale or disposition of
ores or minerals produced by the mining, concentrating and
related operations conducted by FI pursuant to the Contract
of Work, as such agreements may be amended and in effect
from time to time.
"Consolidated Cash Flow" means, with respect to
any Person and for any fiscal quarter, the sum of
(a) consolidated net income after taxes (before deducting
minority interests in net income (loss) of consolidated
subsidiaries, but disregarding all extraordinary or unusual
noncash items in calculating such net income) of such Person
and such Person's subsidiaries for such quarter; plus
(b) consolidated interest paid or accrued on the Corporate
Group Loans and on Debt by such Person or subsidiaries
during such quarter and deducted in determining consolidated
net income; plus (c) depreciation, depletion and
amortization charges and deferred taxes deducted in
computing consolidated net income; provided that such
calculation will exclude items relating to Nonrestricted
Subsidiaries.
"Contract of Work" shall mean the Contract of Work
made December 30, 1991, between the Ministry of Mines of the
Government of the Republic of Indonesia, acting for and on
behalf of the Government of the Republic of Indonesia, and
FI, together with any related Implementation Agreement or
Memorandum of Understanding with such Ministry of Mines
acting on behalf of the Government of the Republic of
Indonesia, as such agreement may be implemented,
supplemented or amended and in effect from time to time.
"Conversion Date" means June 28, 1996.
"Corporate Group Facility" means this Agreement
and the FTX Credit Agreement.
"Corporate Group Loan Exposure" means the sum of
Loan Exposure plus FTX Credit Agreement Loan Exposure.
"Corporate Group Loans" means the Loans made
hereunder and the FTX Credit Agreement Loans made under the
FTX Credit Agreement.
"Corporate Group Notes" means the Promissory Notes
and the FTX Agreement Notes.
"Credit Event" means the making of a Loan.
"Debt" means at any time (1) Indebtedness for
Borrowed Money, (2) the undischarged balance of any production
payment, (3) the unearned balance of any advance
payment received under any contract, and (4) debt created,
issued, Guaranteed, incurred or assumed for the deferred
(for 180 days or more) purchase price of property or services
purchased; excluding, however, accrued expenses and
accounts payable (other than for such deferred purchase
price and/or for borrowed money) incurred in the ordinary
course of business; provided that the same are not overdue
in a material amount or, if overdue, are being contested in
good faith and by appropriate proceedings and also excluding,
for purposes of Section 7.1(i), any obligation or
liability in respect of Debt (including the undischarged
balance of any production payment and the unearned balance
of any advance payment received under any contract) for the
repayment or satisfaction of which the recourse of the
creditor is limited to specified assets or properties (or
the proceeds of production therefrom) of FTX or any
Restricted Subsidiary.
"Deemed Lease" means an agreement characterized by
the parties thereto as a lease solely for income tax purposes
and as to which such parties have elected to have the
provisions of the former Section 168(f)(8) of the Internal
Revenue Code of 1954 apply.
"Default" means any event which upon the giving of
notice or lapse of time or both would become an Event of
Default.
"Dollars" or "$" means United States Dollars.
"Domestic Office" means, for any Bank, the Domestic Office set
forth for such Bank on the signature pages hereof, unless such Bank shall
designate a different Domestic Office by notice in writing to the Agent and
FTX.
"Equity Payment" means (i) any cash dividend on,
or purchase, redemption or other payment in respect of, the
capital stock of FTX (other than mandatory dividend payments
on the Preferred Stock as in effect on the Amendment Closing
Date), (ii) open market purchases by FTX of Depositary Units
of FRP and (iii) open market purchases by FTX of capital
stock of FCX.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" means any trade or business
(whether or not incorporated) which is a member of a group
of which FTX is a member and which is under common control
within the meaning of Section 414 of the Code.
"Event of Default" means any Event of Default
defined in Article VII.
"FCC" means Freeport Chemical Company, a Delaware
corporation.
"FCX" means Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation.
"FI" means P.T. Freeport Indonesia Company, a
limited liability company organized under the laws of
Indonesia and domesticated in Delaware.
"FI Borrowing Base" has the meaning assigned such
term in Section 2.1 of the FTX Credit Agreement.
"FI Free Cash" means the product of (i) the lesser
of (x) the then outstanding Borrowing Base Debt of FI and
(y) 95% of all amounts above $30,000,000 held by FI in cash
or unencumbered Permitted Investments, and (ii) 1.0 minus
the MS Factor of FI.
"FI Obligations" has the meaning assigned to such
term in Section 9.1.
"FI Product" means ores or minerals produced by
the FI Project or otherwise obtained from the Mining Area
(as defined in the Contract of Work) and any kinds of
products, including, without limitation, concentrates,
produced from such ores or minerals.
"FI Project" means the mining, concentrating and
related operations conducted or to be conducted by FI in
Irian Jaya, Indonesia, pursuant to the Contract of Work.
"FI Receivables Purchase Agreement" means any
agreement entered into by FI with respect to the sale by FI
of accounts receivable.
"FI Security Documents" means the FI Trust
Agreement, the Assignment Agreement, the Surat Kuasa, the
Fiduciary Transfer, the Fiduciary Assignment, the Fiduciary
Power and all Uniform Commercial Code financing statements
and their Indonesian equivalents required to be filed
hereunder or under the FI Security Documents.
"FI Trust Agreement" means the Trust Agreement
dated as of May 15, 1970, as amended through the Amendment
Closing Date, among FI, the Banks and the FI Trustee, as the
same may be amended and in effect from time to time.
"FI Trustee" means Morgan Guaranty Trust Company
of New York, or any successor trustee, as trustee for the
Banks pursuant to the FI Trust Agreement and, in such
capacity, as security agent for the Banks under the FI
Security Documents.
"Fiduciary Assignment" means the Fiduciary
Assignment of Accounts Receivable (the Penyerahan Hak Atas
Tagihan) dated December 30, 1991, as amended by the First
Amendment thereto dated the Amendment Closing Date, granted
by FI to the FI Trustee, as the same may be further amended
and in effect from time to time.
"Fiduciary Power" means the Power of Attorney to
Establish Fiduciary Transfer (Kuasa Untuk Memasang
Penyerahan Hak Milik Fidusia) dated December 30, 1991, as
amended by the First Amendment thereto dated the Amendment
Closing Date, granted by FI to the FI Trustee (the "Amended
Fiduciary Power"), as the same may be further amended and in
effect from time to time.
"Fiduciary Transfer" means the Fiduciary Transfer
of Assets (Penyerahan Hak Secara Fidusia) dated December 30,
1991, as amended by the First Amendment thereto dated the
Amendment Closing Date, granted by FI to the FI Trustee, as
the same may be further amended and in effect from time to
time.
"Financial Officer" of any corporation means the
principal financial officer, principal accounting officer,
treasurer, assistant treasurer or controller of such corporation.
"Fixed Charges" means, for any Person at the end
of any fiscal quarter, the cumulative sum, for the four
consecutive quarters ending with such quarter, of (a) the
aggregate principal amount of all Corporate Group Loans
required to be repaid pursuant to Section 3.8(b) of each of
this Agreement and the FTX Credit Agreement and all Debt
paid or payable by such Person and such Person's
Subsidiaries (other than Nonrestricted Subsidiaries) during
such quarters plus (b) all interest paid or payable on Debt
and Corporate Group Loans by such Person and such Person's
Subsidiaries (other than Nonrestricted Subsidiaries) during
such quarters; provided, however, that any principal amount
of Debt and any interest payable in one fiscal quarter and
paid in another shall not be twice included in Fixed
Charges; provided further, however, that any Corporate Group
Loans prepaid pursuant to Section 3.10(a) or Section 3.10(c)
of either this Agreement or the FTX Credit Agreement or
continued or converted pursuant to Section 3.11 of either
this Agreement or the FTX Credit Agreement and any other
Debt prepaid, continued, converted or refinanced pursuant to
similar provisions of agreements or instruments governing
such other Debt shall not be included as Fixed Charges if
such Debt would not otherwise have matured within three
months of such prepayment, continuation, conversion or
refinancing.
"Fixed Charge Ratio" means for any Person at the
end of any fiscal quarter, the quotient, for the four
consecutive quarters ending with such quarter, of
(a) Consolidated Cash Flow divided by (b) Fixed Charges.
"FM Agent" means Chemical Bank as agent for the FM
Lenders under the FM Credit Agreement.
"FM Corporation" means FM Properties Inc., a
Delaware corporation.
"FM Credit Agreement" means the Credit Agreement
dated as of June 11, 1992, among FM Properties, FTX, the FM
Lenders and the FM Agent, as the same may be amended and in
effect from time to time.
"FM Lenders" means the banks party to the FM
Credit Agreement.
"FM Properties" means FM Properties Operating Co.,
a Delaware general partnership whose partners are FTX and FM
Corporation.
"FM Properties Credit" has the meaning assigned to
such term in Section 2.1(iv) of the FTX Credit Agreement.
"FM Properties Indebtedness" means the obligations
of FM Properties under the FM Credit Agreement and up to
$125,000,000 principal amount of the obligations of FM
Properties (including Guarantees of obligations of
Nonrestricted Subsidiaries as to which FM Properties became
a guarantor) assumed in connection with the transfer by FTX
of certain oil, gas and real estate assets to FM Properties
as described in the Information Statement contained in the
Registration Statement filed by FM Corporation on Form 10
with the SEC for the registration of the common stock, par
value $.01 per share, and related preferred stock purchase
rights of FM Corporation under the Securities Exchange Act
of 1934, as such Form 10 was amended through June 9, 1992.
"FRP" means Freeport-McMoRan Resource Partners,
Limited Partnership, a Delaware limited partnership.
"FRP Borrowing Base" has the meaning assigned such
term in Section 2.1 of the FTX Credit Agreement.
"FRP GPCo" means the direct or indirect Wholly-Owned
Subsidiary of FTX which is the entity which has the
rights and obligations of FRP GPCo as defined in and
contemplated by the IMC-Agrico Contribution Agreement.
"FRP Partner" means the Wholly-Owned Restricted
Subsidiary, organized as a limited partnership, of which FRP
will own a majority limited partnership interest and which
has the rights and obligations of FRP Partner as defined in
and contemplated by the IMC-Agrico Contribution Agreement.
"FTX Agent" means Chemical Bank as agent for the
FTX Lenders under the FTX Credit Agreement.
"FTX Agreement Notes" means the promissory notes
of FTX issued to the FTX Lenders pursuant to the FTX Credit
Agreement.
"FTX Borrowing Base" has the meaning assigned to
such term in Section 2.1 of the FTX Credit Agreement.
"FTX Credit Agreement" means the Amended and
Restated Credit Agreement entered into as of May 15, 1991,
as amended and restated in its entirety as of June 1, 1993,
among FTX, FRP, the FTX Lenders and the FTX Agent, as the
same may be further amended and in effect from time to time.
"FTX Credit Agreement Loan" means any loan made by
the FTX Lenders pursuant to the FTX Credit Agreement.
"FTX Credit Agreement Loan Exposure" means the
aggregate amount of unpaid principal of all FTX Credit
Agreement Loans made by the FTX Lenders.
"FTX Credit Agreement Total Commitment" means
$800,000,000, the committed amount under the FTX Credit
Agreement, as the same may be permanently terminated or
reduced from time to time.
"FTX Credit Event" means the making of an FTX
Credit Agreement Loan.
"FTX Free Cash" means the lesser of (i) the then
outstanding Borrowing Base Debt of FTX and (ii) 75% of all
amounts above $50,000,000 held by FTX in cash or
unencumbered Permitted Investments.
"FTX Intercreditor Agreement" means the
Intercreditor Agreement entered into as of June 11, 1992, as
amended and restated in its entirety as of June 1, 1993,
among the Agent on behalf of the Banks, the FTX Agent on
behalf of the FTX Lenders, the FM Agent on behalf of the FM
Lenders, Hibernia National Bank, as agent for the Pel-Tex
Bank Lenders, the Burke Parties (as defined therein) and
Chemical Bank, as collateral agent, as such agreement may be
further amended and in effect from time to time.
"FTX Lenders" means the banks party to the FTX
Credit Agreement.
"FTX Pledge Agreement" means a pledge agreement in
the form of Exhibit A-1 to the FTX Intercreditor Agreement,
to be executed by FTX and delivered to the Collateral Agent
pursuant to Section 5.1(h), as such agreement may be amended
and in effect from time to time.
"FTX Security Agreement" means a security
agreement in the form of Exhibit B-1 to the FTX
Intercreditor Agreement, to be executed by FTX and delivered
to the Collateral Agent pursuant to Section 5.1(h), as such
agreement may be amended and in effect from time to time.
"FTX Subsidiary Pledge Agreement" means a pledge
agreement in the form of Exhibit A-2 to the FTX
Intercreditor Agreement, to be executed by a wholly-owned
Restricted Subsidiary of FTX and delivered to the Collateral
Agent pursuant to Section 5.1(h), as such agreement may be
amended and in effect from time to time.
"FTX Subsidiary Security Agreement" means a
security agreement in the form of Exhibit B-2 to the FTX
Intercreditor Agreement, to be executed by a wholly-owned
Restricted Subsidiary of FTX and delivered to the Collateral
Agent pursuant to Section 5.1(h), as such agreement may be
amended and in effect from time to time.
"GAAP" has the meaning assigned to such term in
Section 1.2.
"Governmental Authority" means any United States
or Indonesian Federal, state, local or foreign court or
governmental agency, authority, instrumentality or
regulatory body.
"Governmental Rule" means any statute, law,
treaty, rule, code, ordinance, regulation, permit,
certificate or order of any Governmental Authority or any
judgment, decree, injunction, writ, order or like action of
any court, arbitrator or other judicial or quasijudicial
tribunal.
"Guarantee" means, with respect to any Person, any
obligation, contingent or otherwise, of such Person guaranteeing
or having the economic effect of guaranteeing any
Debt or obligation of any other Person in any manner,
whether directly or indirectly, and including, without
limitation, any agreement to pay dividends or other distributions
upon the stock of such other Person, or any obligation
of such other Person, direct or indirect, (i) to
purchase (or advance or supply funds for the purchase of)
any security for the payment of such Debt, obligation,
dividend or distribution, (ii) to purchase property, securities
or services for the purpose of assuring the owner of
such Debt or obligation or the holder of such stock of the
payment of such Debt, obligation, dividend or distribution
including, without limitation, any take-or-pay contract or
agreement to buy a minimum amount or quantity of production
or to provide an operating subsidy which, in each case, is
utilized for a third party financing, or (iii) to maintain
working capital, equity capital or any other financial
statement condition of the primary obligor, so as to enable
the primary obligor to pay such Debt, obligation, dividend
or distribution; provided, however, that the term Guarantee
shall not include any endorsement for collection or deposit
in the ordinary course of business.
"Guarantor" has the meaning assigned to such term
in the Introduction.
"HLT" means a transaction which the Agent, on the
basis of any of (i) applicable law, (ii) the rules, regulations,
interpretations, guidelines, statements of policy,
published or unpublished, or directives of Federal or state
bank regulatory authorities and (iii) practices prevailing
in the market as to the interpretation or application of
items referred to in (i) or (ii) above, classifies as a
"highly leveraged transaction" or gives a similar or successor
classification.
"IMC" means IMC Fertilizer, Inc., a Delaware
corporation.
"IMC-Agrico" means a general partnership whose
partners will be FRP Partner, IMC Partner and IMC-Agrico MP,
or such other entity which will have the rights and
obligations of the Partnership as defined in and
contemplated by the IMC-Agrico Contribution Agreement.
"IMC-Agrico Contribution Agreement" means the
Contribution Agreement dated as of April 5, 1993, between
FRP and IMC, as amended and in effect from time to time as
permitted by Section 5.2(r).
"IMC-Agrico MP" means a corporation the equity
interest in which will be owned by the FRP Partner and the
IMC Partner, or such other entity (other than a direct or
indirect subsidiary of IMC-Agrico) that shall have the
rights and obligations of the Managing Partner as defined in
and contemplated by the IMC-Agrico Contribution Agreement.
"IMC-Agrico Parent Agreement" means the Parent
Agreement to be entered into by and among IMC, FRP, FTX and
IMC-Agrico, substantially in the form of Exhibit B to the
IMC-Agrico Contribution Agreement, as amended and in effect
from time to time as permitted by Section 5.2(r).
"IMC Partner" means a corporation that has the
rights and obligations of IMC GPCo as defined in and
contemplated by the IMC-Agrico Contribution Agreement.
"IMC-Agrico Partnership Agreement" means the
Partnership Agreement to be entered into by and among FRP
Partner, IMC Partner and IMC-Agrico MP, substantially in the
form of Exhibit A to the IMC-Agrico Contribution Agreement,
as amended and in effect from time to time as permitted by
Section 5.2(r).
"IMC-Agrico Transfer" means the transfer by FRP to
IMC-Agrico of certain assets related to the phosphate
chemicals business, as described in the IMC-Agrico
Contribution Agreement.
"Indebtedness for Borrowed Money" means, for any
Person, all Guarantees of such person plus all liabilities
of such Person, other than Corporate Group Loans and
Guarantees thereof, in respect of (a) money borrowed,
(b) notes, debentures, bonds or other obligations issued,
(c) obligations for deferred payment for property purchased
having an original maturity greater than one year after the
date of incurrence thereof and (d) Capitalized Lease
Obligations.
"Indocopper Shareholders Agreement" means the
Amended and Restated Shareholders Agreement dated as of
November 12, 1992, by and among P.T. Indocopper Investama
Corporation, FCX, certain individuals and P.T. Bakrie
Investindo.
"Indonesian Taxes" means all present and future
income, stamp and other taxes, levies, imposts, deductions,
charges, compulsory loans and withholdings whatsoever
imposed, assessed, levied or collected by Indonesia or any
political subdivision or taxing authority thereof or therein
or any association or organization of which Indonesia may be
a member (but excluding taxes or other similar governmental
charges, fees or assessments imposed upon the net income of
the Agent, the FI Trustee or any Bank which has its
principal office in Indonesia or a branch office in
Indonesia, unless the presence of such office is solely
attributable to the enforcement of any rights hereunder or
under any FI Security Document with respect to an Event of
Default), together with interest thereon and penalties,
fines and surcharges and other liabilities with respect
thereto, if any, on or in respect of this Agreement, the
Loans to FI, the FI Security Documents, the Assigned
Agreements or the Corporate Group Notes of FI, the
registration, recordation, notarization or other
formalization of any thereof, and any payments of principal,
interest, charges, fees or other amounts made on, under or
in respect of any thereof.
"Interest Payment Date" means (i) as to any
Reference Rate Loan, the next succeeding March 31, June 30,
September 30 or December 31 (subject to Section 3.17), or if
earlier, the Maturity Date, and (ii) as to any other Loan,
the last day of the Interest Period applicable to such Loan
(and, in the case of any Interest Period of more than three
months' or 90 days' duration, the date that would be the
last day of such Interest Period if such Interest Period
were of three months' or 90 days' duration) and the date of
any conversion or continuation of such Loan to a Loan of a
different type.
"Interest Period" means (i) as to any LIBO Rate
Loan, the period commencing on the date of such LIBO Rate
Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day)
in the calendar month that is 1, 2, 3 or 6 months thereafter,
as FI may elect, (ii) as to any CD Rate Loan, a
period of 30, 60, 90 or 180 days' duration, as FI may elect,
commencing on the date of such CD Rate Loan and (iii) as to
any Reference Rate Loan, the period commencing on the date
of such Reference Rate Loan and ending on the earliest of
(x) the next succeeding March 31, June 30, September 30 or
December 31, (y) the Maturity Date and (z) the date such
Reference Rate Loan is converted to a Loan of another type
or repaid or prepaid as permitted hereby; provided, however,
that (1) if any Interest Period would end on a day that
shall not be a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, with
respect to LIBO Rate Loans only, such next succeeding
Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding
Business Day, (2) no Interest Period may be selected with
respect to a LIBO Rate Loan or a CD Rate Loan that would end
later than a Reduction Date occurring after the making of
such Loan if the aggregate outstanding principal amount of
the Corporate Group Loans (after giving effect to all
borrowings and payments of Corporate Group Loans made on the
date of such Loan) having Interest Periods extending beyond
such Reduction Date would otherwise exceed the aggregate
amount of the Commitments as reduced on such Reduction Date,
(3) no Interest Period with respect to any Loan shall end
later than the Maturity Date and (4) interest shall accrue
from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"KfW" means Kreditanstalt fur Wiederaufbau, a
corporation organized under the public law of the Federal
Republic of Germany.
"KfW Credit Agreement" means a credit agreement
between FI and KfW pursuant to terms approved in writing by
the FTX Agent, as amended and in effect from time to time.
"LIBO Rate" means, with respect to any LIBO Rate
Loan for any Interest Period, an interest rate per annum
(rounded upwards, if not already a whole multiple of 1/100
of 1%, to the next higher 1/100 of 1%) equal to the arithmetic
average of the respective rates per annum at which
dollar deposits approximately equal in principal amount to
such LIBO Rate Loan and for a maturity equal to the applicable
Interest Period are offered in immediately available
funds to the London branches of the Reference Banks in the
London Interbank Market for Eurodollars at approximately
11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIBO Rate Loan" means any Loan for which interest
is determined, in accordance with the provisions hereof, at
the Applicable LIBO Rate.
"LIBOR Office" means, for any Bank, the LIBOR
Office set forth for such Bank on the signature pages hereof
or as otherwise notified in writing to the Agent and FTX,
unless such Bank shall designate a different LIBOR Office by
notice in writing to the Agent and FTX.
"Lien" means with respect to any asset, (a) a
mortgage, deed of trust, lien, pledge, encumbrance, charge
or security interest in or on such asset, (b) the interest
of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement
relating to such asset, (c) in the case of securities, any
purchase option, call or similar right of a third party with
respect to such securities except for any purchase option,
call or similar right under the Partnership Agreement as in
effect on the Amendment Closing Date or as modified from
time to time with the consent of the Required Banks and
(d) other encumbrances of any kind, including, without
limitation, production payment obligations.
"Loan" means any loan made pursuant to
Section 3.2.
"Loan Documents" means the Amendment Agreement,
the Corporate Group Facility, the Corporate Group Notes, the
FTX Intercreditor Agreement, the Security Agreement, the
Pledge Agreement, the FI Security Documents and all other
agreements, certificates and instruments now or hereafter
entered into in connection with any of the foregoing, in
each case as amended and modified from time to time.
"Loan Exposure" means the aggregate amount of
unpaid principal of all Loans made by the Banks.
"Long-Term Concentrate Sales Agreement" means any
Concentrate Sales Agreement with a term of at least one
year.
"Major Subsidiary" means each of FI and FRP.
"Margin Stock" has the meaning assigned to such
term in Regulation U of the Board, as the same is from time
to time in effect.
"Maturity Date" means December 31, 1999, or, if
earlier, the date of termination of the Commitments pursuant
to the terms hereof.
"Memorandum of Understanding" means the Memorandum
of Understanding dated as of December 27, 1991, between the
Ministry of Mines and Energy of the Government of the
Republic of Indonesia, and FI as amended, modified or
supplemented and in effect from time to time.
"MS Factor" has the meaning assigned to such term
in Section 2.1 of the FTX Credit Agreement.
"Multiemployer Plan" means a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which FTX or any
ERISA Affiliate is making or accruing an obligation to make
contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.
"Net Asset Value" means the present value assigned
to an asset by FTX based on the assumptions utilized in the
most recent engineering or other asset valuation report
provided to each Borrowing Base Bank pursuant to
Section 5.1(g), as adjusted for FTX's net ownership interest
and after coverage as provided in the most recent Borrowing
Base Certificates, as certified by the Treasurer or another
Financial Officer of FTX for purposes of Section 2.5 of the
FTX Credit Agreement.
"Net Proceeds" means (i) the gross fair market
value of the consideration or other amounts payable to or
receivable by FTX, any Restricted Subsidiary and IMC-Agrico,
in respect of any sales, transfers, distributions (other
than cash dividends and dividends by FTX consisting of stock
or units of the Subsidiaries) or other dispositions of
assets or properties (including any capital or other equity
interests owned, but excluding direct issuances of equity by
FTX or a Restricted Subsidiary other than in the ordinary
course of business, less (ii) the amount, if any, of all
taxes (but including income taxes only to the extent such
Person reasonably estimates that such income taxes will be
paid on the date of the next income tax filing by such
Person or such affiliate of such Person), and reasonable and
customary fees, commissions, costs and other expenses (other
than those payable to FTX, any Restricted Subsidiary, IMC or
any affiliate of IMC) which are incurred in connection with
such sales, transfers, distributions or other dispositions
and are payable by the seller or the transferor of the
assets or property to which such sales, transfers,
distributions or other dispositions relate, but only to the
extent not already deducted in arriving at the amount
referred to in clause (i); provided, however, that with
respect to IMC-Agrico, for purposes of Section 2.5 of the
FTX Credit Agreement, only the FRP Share in excess of
$25,000,000 shall be deemed to constitute Net Proceeds.
"FRP Share" means the Capital Interest of FRP Partner
multiplied by the amount preceding this proviso.
"1992 Form 10-K" has the meaning assigned to such
term in Section 4.1(e).
"Nonrestricted Subsidiary" means (i) any of the
following: Bella Luna Incorporated, a Louisiana
corporation, Eastern Mining Company Inc., a Delaware
corporation, Freeport Copper Company, a Delaware
corporation, Freeport-McMoRan Chile Inc., a Delaware
corporation, Freeport-McMoRan Spain Incorporated, a Delaware
corporation, Freeport-McMoRan Thaitex Company, a Delaware
corporation, Freeport-Warim, Inc., a Delaware corporation,
P.T. Indonesia Freeport Finance Company, an Indonesian
corporation, Freeport Egyptian Sulphur Company, a Delaware
corporation, Dill Holdings Incorporated, a Delaware
corporation, Freeport International, Incorporated, a Delaware
corporation, and Freeport Mining Company, a Delaware
corporation, (ii) any Subsidiary of any Nonrestricted
Subsidiary and (iii) any surviving corporation (other than
FTX or a Restricted Subsidiary) into which any of such
corporations referred to in clause (i) or (ii) is merged or
consolidated, subject to Section 5.2(c) and (iv) any
Subsidiary organized after the date of this Agreement for
the purpose of acquiring the stock or assets of another
Person or for start-up ventures or exploration programs or
activities. By written notice to the Agent, FTX may
(x) declare any Nonrestricted Subsidiary to be a Restricted
Subsidiary and such former Nonrestricted Subsidiary shall
thereafter be deemed to be a Restricted Subsidiary for all
purposes of this Agreement or (y) at any time other than
when a Default or Event of Default has occurred and is
continuing or the aggregate principal amount of the
Corporate Group Loans exceeds the Available Borrowing Base,
in any fiscal year, declare one or more Restricted
Subsidiaries, the interest of FTX in all of which has an
equity value or loan investment of less than $5,000,000 in
the aggregate, to be a Nonrestricted Subsidiary and any such
former Restricted Subsidiary shall thereafter be deemed to
be a Nonrestricted Subsidiary for all purposes of this
Agreement.
"Operating Lease" means any lease other than a
lease giving rise to a Capitalized Lease Obligation.
"Original Execution Date" means October 27, 1989.
"Partnership Agreement" has the meaning assigned
to such term in the FM Credit Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Pel-Tex Agreements" means the Loan Agreement and
related documents dated as of December 31, 1985, as amended
and in effect from time to time, among FTX, as ultimate
successor to FMP Operating Company (as purchaser), and Pel-Tex
Oil Company, Inc., Chenier Oil Company, Inc., Burke and
Pel-Tex Oil Company, Inc., doing business as Burmont
Company, Earl P. Burke, Jr., and Fay Stouder Burke (as
sellers).
"Pel-Tex Bank Agreement" means the Credit
Agreement dated as of December 31, 1985, among the Burke
Parties, the banks named therein and Hibernia National Bank,
as agent for such banks, as the same may be amended and in
effect from time to time.
"Pel-Tex Lenders" means, collectively, Burke Oil
Company (formerly, Pel-Tex Oil Company, Inc.), Chenier Oil
Company, Inc., Burke and Pel-Tex Oil Company, Inc., doing
business as Burmont Company, Earl P. Burke, Jr., and Fay
Stouder Burke (collectively, the "Burke Parties") and the
banks party to the Pel-Tex Bank Agreement.
"Permitted Investments" means (a) certificates of
deposit of, or other bank accounts with, banks (or with
their branches) having a short-term deposit rating issued by
Moody's Investors Services, Inc., of P-1; (b) investments in
readily marketable money market funds having assets in
excess of one billion dollars, which assets have an average
life of less than one year and an average quality of at
least "A" as rated by Standard & Poor's Corporation or
Moody's Investors Services, Inc.; and (c) commercial paper
rated A-1 by Standard & Poor's Corporation or P-1 by Moody's
Investors Services, Inc.
"Permitted Secured Swap" means any interest rate
protection agreement or commodities price protection
agreement between FTX, FI or FRP and any Bank that shall be
ratably secured pursuant to this Agreement, the FTX
Intercreditor Agreement, an intercreditor agreement relating
to the assets of FI subject to the FI Security Documents
and, in the case of any such interest rate or commodities
price protection agreement with FI, the FI Security
Documents.
"Person" means an individual or a corporation,
partnership, trust, incorporated or unincorporated association,
joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
"Plan" means any pension plan (other than a
Multiemployer Plan) which is subject to the provisions of
Title IV of ERISA and which is maintained for employees of
FTX or any ERISA Affiliate.
"Pledge Agreement" means, collectively, the FTX
Pledge Agreement and any FTX Subsidiary Pledge Agreement.
"Power Facilities Transfer" means, collectively,
each transfer by FI of electric power generation and
transmission facilities with arrangements providing for the
continued supply of electric power to the FI Project, all on
terms and conditions approved by the Agent.
"Preferred Stock" has the meaning assigned to such
term in Section 5.2(q).
"Promissory Notes" means the promissory notes of
FI referred to in Section 3.5.
"Reduction Date" has the meaning assigned to such
term in Section 3.8(b).
"Reference Banks" means Chemical Bank, ABN Amro
Bank, N.V., and National Westminster bank, PLC.
"Reference Rate Loan" means any Loan for which
interest is determined, in accordance with the provisions
hereof, at the Applicable Reference Rate.
"Reportable Event" means any "reportable event" as
defined in Section 4043(b) of ERISA or the regulations
issued thereunder.
"Required Banks" means at any time Banks having
Commitments representing at least 66-2/3% of the aggregate
Commitments hereunder.
"Required Borrowing Base Banks" has the meaning
assigned to such term in Article I of the FTX Credit
Agreement.
"Responsible Officer" of any corporation means any
executive officer or Financial Officer of such corporation
and any other officer or similar official thereof responsible
for the administration of the obligations of such corporation
in respect of this Agreement.
"Restricted Subsidiary" means FRP, FCX, FI, FRP
Partner, FRP GPCo, FCC and any other Subsidiary that is not
a Nonrestricted Subsidiary.
"Sales Proceeds Account" has the meaning assigned
to such term in the FI Trust Agreement.
"Scheduled Principal Payments" for any period and
for any Person means the aggregate principal amount of all
Loans repaid pursuant to Section 3.10(b) by virtue of
Section 3.8(b) in such period, (ii) the aggregate principal
amount of all FTX Credit Agreement Loans repaid pursuant to
Section 3.10(b) by virtue of Section 3.8(b) of the FTX
Credit Agreement in such period, plus (iii) scheduled
principal payments on all Debt.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" means, collectively, the FTX
Security Agreement and any FTX Subsidiary Security
Agreement.
"Shared Collateral" has the meaning assigned such
terms in the FTX Intercreditor Agreement.
"Statutory Reserves" means a fraction (expressed
as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including, without
limitation, any marginal, special, emergency, or supplemental
reserves) expressed as a decimal established by the
Board and any other banking authority to which any Bank is
subject (a) with respect to the Adjusted CD Rate, for new
negotiable time deposits in Dollars of over $100,000 with
maturities approximately equal to the applicable Interest
Period and (b) with respect to the LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D of the Board).
Such reserve percentages shall include, without limitation,
those imposed under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Subordination Provisions" means the form of
subordination provisions attached hereto as Exhibit A.
"Subsidiary" means as to any Person, any
corporation at least a majority of whose securities having
ordinary voting power for the election of directors (other
than securities having such power only by reason of the
happening of a contingency) are at the time owned by such
Person and/or one or more other Subsidiaries of such Person
and any partnership (other than joint ventures for which the
intention under the applicable agreements, including
operating agreements, if any, is that such joint ventures be
partnerships solely for purposes of the Code) in which such
Person or a Subsidiary of such Person is a general partner;
provided that unless otherwise specified, "Subsidiary" means
a Subsidiary of FTX and provided, further, that FM
Properties, FM Corporation and IMC-Agrico shall not at any
time be Subsidiaries for any purposes of this Agreement.
"Surat Kuasa" means the Surat Kuasa (Power of
Attorney) dated December 30, 1991, as amended by the First
Amendment thereto dated the Amendment Closing Date, granted
by FI to the FI Trustee, as the same may be further amended
and in effect from time to time.
"Termination Event" means any event or condition
which constitutes grounds under Section 4042 of ERISA for
the termination of, or for the appointment of a trustee to
administer, any Plan.
"Total Commitment" means the sum of all the then
effective Commitments.
"Transfer Effective Date" has the meaning assigned
to such term in each Commitment Transfer Supplement.
"Transferee" means any Participant or Purchasing
Bank, as such terms are defined in Section 10.3.
"Unused Net Commitment Amount" means the amount of
the FTX Credit Agreement Total Commitment less the Corporate
Group Loan Exposure.
"Wholly-Owned Restricted Subsidiary" means any
Subsidiary all of the stock of which is at the time owned by
FTX, FRP and/or one or more other Wholly-Owned Restricted
Subsidiaries of either of them.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.2. Accounting Terms. Except as otherwise
herein specifically provided, each accounting term used
herein shall have the meaning given it under United States
generally accepted accounting principles in effect from time
to time (with such changes thereto as are approved or
concurred in from time to time by FTX's independent public
accountants, as applicable) applied on a basis consistent
with those used in preparing the financial statements
referred to in Section 5.1(a) ("GAAP"); provided, however,
that each reference in Section 5.2 hereof, or in the
definition of any term used in Section 5.2 hereof, to GAAP
shall mean generally accepted accounting principles as in
effect on the Amendment Closing Date and as applied by FTX
in preparing the financial statements referred to in
Section 4.1(e).
SECTION 1.3. Section, Article, Exhibit and
Schedule References. Unless otherwise stated, Section,
Article, Exhibit and Schedule references made herein are to
Sections, Articles, Exhibits or Schedules, as the case may
be, of this Agreement.
ARTICLE II
[Intentionally left blank.]
ARTICLE III
The Loans
SECTION 3.1. [Intentionally left blank.]
SECTION 3.2. Revolving Credit Facility. Upon the
terms and subject to the conditions and relying upon the
representations and warranties herein set forth, each Bank,
severally and not jointly, agrees to make Loans to FI, at
any time and from time to time during the Commitment Period,
in an aggregate principal amount at any one time outstanding
not to exceed such Bank's Applicable Percentage of the
Unused Net Commitment Amount on the Borrowing Date for such
Loan. Within the foregoing limits, FI may borrow, repay and
reborrow, prior to the Maturity Date, all or any portion of
the Commitments hereunder, subject to the terms, provisions
and limitations set forth herein; provided, however, that no
borrowing shall be made hereunder if (i) after giving effect
thereto the principal amount outstanding of the Loans of any
Bank would exceed the Commitment of such Bank or (ii) except
for continuations or conversions of existing Loans during
any applicable 90-day period referred to in Section 2.4 of
the FTX Credit Agreement without increase in the principal
amount of such Loans, the aggregate principal amount of all
the Corporate Group Loans would exceed the lesser of (x) the
then current Available Borrowing Base or (y) the then
current FTX Credit Agreement Total Commitment.
SECTION 3.3. Loans. (a) The Loans made by the
Banks to FI on any one date shall be in a minimum aggregate
principal amount of $5,000,000 and an integral multiple of $1,000,000.
The first Loan by each Bank to FI made after the Amendment Closing
Date shall be made against delivery to such Bank of an appropriate
Promissory Note, payable to the order of such Bank in the amount of
its Commitment, executed by FI, as referred to in Section 3.5.
(b) Each Loan shall be either a Reference Rate Loan, a CD
Rate Loan or a LIBO Rate Loan as FI may request pursuant to
Section 3.4. Subject to the provisions of Sections 3.4 and 3.11,
Loans of more than one type may be outstanding at the same time.
(c) Each Bank shall make its portion, as determined under
Section 3.15, of each Loan hereunder on the proposed date thereof by
paying the amount required to the Agent in New York, New York in
immediately available funds not later than 2:00 p.m., New York City
time, and the Agent shall by 3:00 p.m., New York City time, credit the
amounts so received to the general deposit account of FI with the
Agent or, if Loans shall not be made on such date because any
condition precedent to a borrowing herein specified is not met, return
the amounts so received to the respective Banks. Unless the Agent
shall have received notice from a Bank prior to the date of any Loan
that such Bank will not make available to the Agent such Bank's
portion of such Loan, the Agent may assume that such Bank has made
such portion available to the Agent on the date of such Loan in
accordance with this paragraph (c) and the Agent may, in reliance upon
such assumption, make available to FI on such date a corresponding
amount. If and to the extent that such Bank shall not have made such
portion available to the Agent, such Bank and FI severally agree to
repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount
is made available to the applicable Borrower until the date such
amount is repaid to the Agent at the interest rate applicable at such
time to such Loan. If such Bank shall repay to the Agent such
corresponding amount, such amount shall constitute such Bank's Loan
for purposes of this Agreement.
SECTION 3.4. Notice of Loans. (a) FI shall give the
Agent irrevocable telephonic (promptly confirmed in writing),
written, telecopy or telex notice in the form of Exhibit B with
respect to each Loan (i) in the case of a LIBO Rate Loan, not later
than 10:30 a.m., New York City time, three Business Days before a
proposed borrowing, (ii) in the case of a CD Rate Loan, not later
than 10:30 a.m., New York City time, one Business Day before a
proposed borrowing, and (iii) in the case of a Reference Rate Loan,
not later than 10:30 a.m., New York City time, on the date of a
proposed borrowing. Such notice shall be irrevocable (except that in
the case of a LIBO Rate Loan, FI may, subject to Section 3.14,
revoke such notice by giving written or telex notice thereof to the
Agent not later than 10:30 a.m., New York City time, two Business Days
before such proposed borrowing) and shall in each case refer to this
Agreement and specify (1) whether the Loan then being requested is to
be a Reference Rate Loan, CD Rate Loan or LIBO Rate Loan, (2) the date
of such Loan (which shall be a Business Day) and amount thereof, and
(3) if such Loan is to be a CD Rate Loan or LIBO Rate Loan, the
Interest Period or Interest Periods with respect thereto. If no
election as to the type of Loan is specified in any such notice by FI,
such Loan shall be a Reference Rate Loan. If no Interest Period
with respect to any CD Rate Loan or LIBO Rate Loan is
specified in any such notice by FI, then (x) in the case of
a CD Rate Loan, FI shall be deemed to have selected an
Interest Period of 30 days' duration and (y) in the case of
a LIBO Rate Loan, FI shall be deemed to have selected an
Interest Period of one month's duration. The Agent shall
promptly advise the other Banks of any notice given by FI
pursuant to this Section 3.4(a) and of each Bank's portion
of the requested Loan.
(b) FI may continue or convert all or any part of
any Loan with a Loan of the same or a different type in
accordance with Section 3.11 and subject to the limitations
set forth therein.
(c) Notwithstanding any provision to the contrary
in this Agreement, FI shall not in any notice of borrowing
under this Section 3.4 request any CD Rate Loan or LIBO Rate
Loan which, if made, would result in more than 20 separate
CD Rate Loans and LIBO Rate Loans of any Bank and CD Rate
Loans and LIBO Rate Loans (each as defined in the FTX Credit
Agreement) of any FTX Lender being outstanding under the
Corporate Group Facility at any one time. For purposes of
the foregoing, Loans having different Interest Periods,
regardless of whether they commence on the same date, shall
be considered separate Loans.
SECTION 3.5. Promissory Notes. (a) The Loans
made by each Bank to FI shall be evidenced by a Promissory
Note duly executed on behalf of FI, dated the Original
Execution Date, in substantially the form attached hereto as
Exhibit C, payable to such Bank in a principal amount equal
to its Commitment on such date. The outstanding principal
balance of each Loan, as evidenced by such Promissory Note,
shall be payable on the Maturity Date. Each Note shall bear
interest from its date on the outstanding principal balance
thereof, as provided in Section 3.6.
(b) Each Bank, or the Agent on its behalf, shall,
and is hereby authorized by FI to, endorse on the schedule
attached to the Promissory Note delivered by FI to such Bank
(or on a continuation of such schedule attached to such
Promissory Note and made a part thereof), or otherwise
record in such Bank's internal records, an appropriate
notation evidencing the date and amount of each Loan from
such Bank to FI, as well as the date and amount of each
payment and prepayment with respect thereto; provided,
however, that the failure of any Bank or the Agent to make
such a notation or any error in such a notation shall not
affect the obligation of FI under such Promissory Note.
SECTION 3.6. Interest on Loans. (a) Subject to
the provisions of Section 3.9, each Reference Rate Loan
shall bear interest at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be), equal to the
Applicable Reference Rate. Interest on each Reference Rate
Loan shall be payable on the applicable Interest Payment
Date.
(b) Subject to the provisions of Section 3.9,
each CD Rate Loan shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Applicable CD Rate for
the Interest Period in effect for such Loan. Interest on
each CD Rate Loan shall be payable on each applicable
Interest Payment Date. The Applicable CD Rate shall be
determined by the Agent, and such determination shall be
conclusive absent manifest error. The Agent shall promptly
advise FI and each Bank of such determination.
(c) Subject to the provisions of Section 3.9,
each Loan which is a LIBO Rate Loan shall bear interest at a
rate per annum (computed on the basis of the actual number
of days elapsed over a year of 360 days) equal to the
Applicable LIBO Rate for the Interest Period in effect for
such Loan. Interest on each such LIBO Rate Loan shall be
payable on each applicable Interest Payment Date. The
Applicable LIBO Rate shall be determined by the Agent, and
such determination shall be conclusive absent manifest
error. The Agent shall promptly advise FI and each Bank of
such determination.
(d) If the Applicable Margins for Loans change
pursuant to Schedule II-1 or II-2 as a result of a change in
the Cash Flow Ratio, such change shall become effective on
the first day of the third month after the last day of the
fiscal quarter with respect to which such Cash Flow Ratio
was calculated and shall continue in effect until the first
day of the third month after the last day of the next
succeeding fiscal quarter for which a change in the Cash
Flow Ratio would require a different Applicable Margin for
Loans pursuant to Schedule II-1 or II-2.
SECTION 3.7. Fees. (a) On the last Business Day
of each March, June, September and December, and on the
Maturity Date, FI shall pay each Bank, through the Agent, a
commitment fee (a "Commitment Fee") from and including the
Original Execution Date through and including the Maturity
Date on (i) with respect to any quarter (or shorter period
commencing with the Original Execution Date or ending on the
date immediately preceding the Amendment Closing Date) prior
to the Amendment Closing Date, the average daily unused
amount of such Bank's Commitment (as defined in and
calculated in accordance with this Agreement as in effect
prior to the Amendment Closing Date), if any, equal to 1/4
of 1% per annum and (ii) with respect to any quarter after
the Amendment Closing Date, the amount set forth in and
pursuant to (and not in duplication of) Section 3.7(a) of
the FTX Credit Agreement.
(b) [Intentionally left blank.]
(c) All Commitment Fees under this Section 3.7
shall be computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be.
The Commitment Fees due to each Bank shall cease to accrue
on the earlier of the Maturity Date and the termination of
the Commitment of such Bank pursuant to Section 3.8.
(d) On the Amendment Closing Date FTX will also
pay to each Bank a participation fee (a "Participation Fee")
as set forth on Schedule IV to the FTX Credit Agreement,
such fee to be paid pursuant to Section 3.7(d) of the FTX
Credit Agreement and not in duplication of such fee.
(e) FTX agrees to pay to the Agent, for its own
account pursuant hereto and to the FTX Credit Agreement, on
May 15th of each year, an agency fee (the "Agency Fee") as
agreed between FTX and the Agent.
SECTION 3.8. Maturity and Reduction of Commitments.
(a) Upon at least five days' prior written or telex
notice to the Agent, FI may without penalty at any time in
whole permanently terminate, or from time to time permanently
reduce, the Total Commitment, ratably among the Banks
in accordance with the amounts of their respective Commitments;
provided, however, that each partial reduction of the
Commitment Amount shall be in a minimum principal amount of
$5,000,000 and an integral multiple of $1,000,000; provided
further, that the Total Commitment may not be reduced to an
amount which is less than the lesser of (i) the aggregate
principal amount of all Loans outstanding after such
reduction and (ii) the amount of the FTX Credit Agreement
Total Commitment on such date.
(b) The Total Commitment shall be permanently
reduced on the Conversion Date to the aggregate principal
amount of the Loans outstanding on such date (after giving
effect to any Loans made on such date). Thereafter, the
Total Commitment shall be reduced on the last Business Day
of March, June, September and December in each year (each a
"Reduction Date"), commencing on September 30, 1996, by
14 consecutive reductions, each in an amount equal to the
lesser of (i) 1/14th of the Total Commitment as in effect on
the Conversion Date after reduction as aforesaid and
(ii) the Total Commitment on such Reduction Date.
(c) [Intentionally left blank.]
(d) [Intentionally left blank.]
(e) On the Maturity Date the Commitments shall
terminate and any outstanding Loans shall be due and payable
in full.
SECTION 3.9. Interest on Overdue Amounts; Alternative
Rate of Interest. (a) If FI shall default in the
payment of the principal of or interest on any Corporate
Group Loan or any other amount becoming due hereunder or
under the FTX Credit Agreement), by acceleration or
otherwise, FI shall on demand from time to time pay
interest, to the extent permitted by law, on such defaulted
amount up to the date of actual payment (after as well as
before judgment):
(i) in the case of the payment of principal of or
interest on a CD Rate Loan or LIBO Rate Loan, at a
rate 2% above the rate which would otherwise be payable
under Section 3.6(b) or (c), as the case may be, until
the scheduled maturity date with respect thereto and
thereafter as provided in clause (ii) below; and
(ii) in the case of the payment of principal of or
interest on a Reference Rate Loan or any other amount
payable hereunder (other than principal of or interest
on any CD Rate Loan or LIBO Rate Loan to the extent
referred to in clause (i) above), at a rate 2% above
the Applicable Reference Rate.
(b) In the event, and on each occasion, that on
the day two Business Days prior to the commencement of any
Interest Period for a LIBO Rate Loan the Agent shall have
determined (which determination shall be conclusive and
binding upon FI absent manifest error) that (i) dollar
deposits in the requested principal amount of such LIBO Rate
Loan are not generally available in the London Interbank
Market, (ii) the rate at which dollar deposits are being
offered will not adequately and fairly reflect the cost to
any Bank of making or maintaining the principal amount of
such LIBO Rate Loan during such Interest Period or
(iii) reasonable means do not exist for ascertaining the
Applicable LIBO Rate, the Agent shall as soon as practicable
thereafter give written or telex notice of such
determination to FI and the other Banks, and any request by
FI for the making, continuation or conversion of a LIBO Rate
Loan pursuant to Section 3.4 or 3.11 shall, until the Agent
shall have advised FI and the Banks that the circumstances
giving rise to such notice no longer exist, be deemed to be
a request for a Reference Rate Loan: provided, however,
that if the Agent makes the determination specified in (ii)
above, at the option of FI such request shall be deemed to
be a request for a Reference Rate Loan only from such Bank
referred to in (ii) above; provided further, however, that
such option shall not be available to FI if the Agent makes
the determination specified in (ii) above with respect to
three or more Banks. Each determination of the Agent
hereunder shall be conclusive absent manifest error.
(c) In the event, and on each occasion, that on
or before the day on which the Adjusted CD Rate for a CD
Rate Loan is to be determined, the Agent shall have
determined (which determination shall be conclusive and
binding upon FI absent manifest error) that (i) the Adjusted
CD Rate for such Loan cannot be ascertained for any reason,
including, without limitation, the inability or failure of
the Agent to obtain sufficient bids in accordance with the
terms of the definition of Base CD Rate, or (ii) that the
Adjusted CD Rate for such CD Rate Loan will not adequately
and fairly reflect the cost to any Bank of making or
maintaining the principal amount of such CD Rate Loan during
such Interest Period, the Agent shall, as soon as
practicable thereafter, give written or telex notice of such
determination to FI and the other Banks, and any request by
FI for the making, continuation or conversion of a CD Rate
Loan pursuant to Section 3.4 or 3.11 shall, until the Agent
shall have advised FI and the Banks that the circumstances
giving rise to such notice no longer exist, be deemed to be
a request for a Reference Rate Loan; provided, however, that
if the Agent makes the determination specified in (ii)
above, at the option of FI such request shall be deemed to
be a request for a Reference Rate Loan only from such Bank
referred to in (ii) above; provided further, however, that
such option shall not be available to FI if the Agent makes
the determination specified in (ii) above with respect to
three or more Banks. Each determination by the Agent
hereunder shall be conclusive absent manifest error.
SECTION 3.10. Prepayment of Loans. (a) FI shall
have the right at any time and from time to time to prepay
any Loan, in whole or in part, subject to the requirements
of Section 3.14 but otherwise without premium or penalty,
upon prior written or telex notice to the Agent by
10:30 a.m., New York City time, on the date of such
prepayment; provided, however, that each such partial
prepayment shall be in a minimum amount of $5,000,000 and an
integral multiple of $1,000,000.
(b) FI shall from time to time pay or prepay so
much of the Loans as shall be necessary in order that
(i) the aggregate principal amount of the Corporate Group
Loans (after giving effect to any other prepayment of
Corporate Group Loans on such date) outstanding will not
exceed the FTX Credit Agreement Total Commitment then in
effect and (ii) the aggregate principal amount of the Loans
(after giving effect to any other prepayment of Loans on
such date) outstanding will not exceed the Total Commitment
then in effect. All prepayments under this Section shall be
subject to Section 3.14.
(c) Not later than 90 days after each reduction
in the amount of the Borrowing Base as a result of any
redetermination of the Borrowing Base Factors pursuant to
Article II of the FTX Credit Agreement, FI shall prepay the
outstanding Loans in such amount as may be necessary so that
the aggregate principal amount of the outstanding Corporate
Group Loans (after giving effect to any other prepayment of
Corporate Group Loans on such date) does not exceed the
Available Borrowing Base after giving effect to such
reduction; provided, however, that if such reduction in the
Borrowing Base is a result of any sales, transfers,
distributions, or other dispositions of assets or properties
(including, without limitation, shares of any capital stock
or other equity interests of any Restricted Subsidiary)
other than in the ordinary course of business, such 90-day
grace period will not apply with respect to the required
mandatory prepayment. During any such applicable 90-day
period, continuations or conversions of Loans in accordance
with Section 3.11 are permitted; provided that the Interest
Periods for such continued or converted borrowings do not
extend beyond such 90-day period unless the condition
requiring prepayments pursuant to this Section 3.10(c) shall
no longer exist. Any prepayment of any CD Rate Loan or LIBO
Rate Loan pursuant to this Section 3.10(c) shall be subject
to Section 3.14.
(d) Each notice of prepayment delivered pursuant
to paragraph (a) above shall specify the prepayment date and
the principal amount of each Loan (or portion thereof) to be
prepaid, shall be irrevocable and shall commit FI to prepay
such Loan by the amount stated therein on the date stated
therein. All prepayments shall be applied first to
Reference Rate Loans and then to other Loans and shall be
accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment. Any amounts
prepaid may be reborrowed to the extent permitted by the
terms of this Agreement.
(e) The Loans of FI shall be paid or prepaid
pursuant to Section 5.1(i).
SECTION 3.11. Continuation and Conversion of
Loans. FI shall have the right, subject to the provisions
of Section 3.9, (i) on three Business Days' prior
irrevocable notice by FI to the Agent, to continue or
convert any type of Loans with LIBO Rate Loans, (ii) on one
Business Day's prior irrevocable notice by FI to the Agent,
to continue or convert any type of Loans with CD Rate Loans
or (iii) with irrevocable notice by FI to the Agent by
10:30 a.m. on the date of such proposed continuation or
conversion, to continue or convert any type of Loans with
Reference Rate Loans, in each case subject to the following
further conditions:
(a) each continuation or conversion shall be made
pro rata as to each type of Loan of FI to be continued
or converted among the Banks in accordance with the
respective amounts of their Commitments and the notice
given to the Agent by FI shall specify the aggregate
amount of Loans to be continued or converted;
(b) in the case of a continuation or conversion of
less than all Loans of FI, the Loans continued or
converted shall be in a minimum aggregate principal
amount of $5,000,000 and an integral multiple of
$1,000,000;
(c) accrued interest on each Loan (or portion
thereof) being continued or converted shall be paid by
FI at the time of continuation or conversion;
(d) the Interest Period with respect to any Loan
made in respect of a continuation or conversion thereof
shall commence on the date of the continuation or
conversion;
(e) any portion of a Loan maturing or required to
be prepaid in less than 30 days may not be continued or
converted with a CD Rate Loan and any portion of a Loan
maturing or required to be prepaid in less than one
month may not be continued or converted with a LIBO
Rate Loan;
(f) a CD Rate Loan or a LIBO Rate Loan may be
continued or converted on the last day of the
applicable Interest Period and, subject to
Section 3.14, on any other day;
(g) no Loan (or portion thereof) may be continued
or converted into a CD Rate Loan or LIBO Rate Loan if,
after such continuation or conversion, an aggregate of
more than 20 separate CD Rate Loans and LIBO Rate Loans
of any Bank and CD Rate Loans and LIBO Rate Loans (each
as defined in the FTX Credit Agreement) of any FTX
Lender would be outstanding under the Corporate Group
Facility determined as set forth in Section 3.4(c);
(h) no Loan shall be continued or converted if
such Loan by any Bank would be greater than the amount
by which its Commitment exceeds the amount of its other
Loans at the time outstanding or if such Loan would not
comply with the other provisions of this Agreement,
including clause (ii) of the proviso to Section 3.2;
and
(i) any portion of a LIBO Rate Loan or CD Rate
Loan which cannot be converted into or continued as a
LIBO Loan or CD Rate Loan by reason of (e) and (g)
above shall be automatically converted at the end of
the Interest Period in effect for such Loan into a
Reference Rate Loan.
The Agent shall communicate the information contained in
each irrevocable notice delivered by FI pursuant to this
Section 3.11 to the other Banks promptly after its receipt
of the same.
The Interest Period applicable to any CD Rate Loan
or LIBO Rate Loan resulting from a continuation or
conversion shall be specified by FI in the irrevocable
notice of continuation or conversion delivered pursuant to
this Section; provided, however, that if no such Interest
Period shall be specified, FI shall be deemed to have
selected an Interest Period in the case of a CD Rate Loan of
30 days' duration, and in the case of a LIBO Rate Loan of
one month's duration.
For purposes of this Section 3.11, notice received
by the Agent from FI after 10:30 a.m., New York time, in the
case of a request for a LIBO Rate Loan or a CD Rate Loan, or
2:00 p.m., New York time, in the case of a request for a
Reference Rate Loan, on a Business Day shall be deemed to be
received on the immediately succeeding Business Day.
SECTION 3.12. Reserve Requirements; Change in
Circumstances. (a) FI shall pay to each Bank on the last
day of each Interest Period for any LIBO Rate Loan so long
as such Bank may be required to maintain reserves against
Eurocurrency Liabilities (as defined in Regulation D of the
Board) (or so long as such Bank may be required to maintain
reserves against any other category of liabilities which
includes deposits by reference to which the interest rate on
any LIBO Rate Loan is determined as provided in this
Agreement or against any category of extensions of credit or
other assets of such Bank which includes any LIBO Rate Loan)
an additional amount (determined by such Bank and notified
to FI), equal to the product of the following for each
affected LIBO Rate Loan for each day during such Interest
Period:
(i) the principal amount of such affected LIBO
Rate Loan outstanding on such day; and
(ii) the remainder of (x) the product of Statutory
Reserves on such date times the Applicable LIBO Rate on
such day minus (y) the Applicable LIBO Rate on such
day; and
(iii) 1/360.
Each Bank shall separately bill FI directly for all amounts
claimed pursuant to this Section 3.12(a).
(b) Notwithstanding any other provision herein,
if after the Amendment Closing Date any change in condition
or applicable law or regulation or in the interpretation or
administration thereof (whether or not having the force of
law and including, without limitation, Regulation D of the
Board) by any authority charged with the administration or
interpretation thereof shall occur which shall:
(i) subject any Bank (which shall for the purpose
of this Section include any assignee or lending office
of any Bank) to any tax with respect to any amount paid
or to be paid by any Bank with respect to its LIBO Rate
Loans or CD Rate Loans (other than any franchise tax or
tax or other similar governmental charges, fees or
assessments based on the overall net income of such
Bank by the U.S. Federal government or by any
jurisdiction in which such Bank maintains an office,
unless the presence of such office is solely
attributable to the enforcement of any rights hereunder
or under any FI Security Document with respect to an
Event of Default);
(ii) change the basis of taxation of payments to
any Bank of principal of or interest on its LIBO Rate
Loans or CD Rate Loans or other fees and amounts
payable hereunder, or any combination of the foregoing
(other than any franchise tax or tax or other similar
governmental charges, fees or assessments based on the
overall net income of any Bank by the U.S. Federal
government or by any jurisdiction in which such Bank
maintains an office unless the presence of such office
is solely attributable to the enforcement of any rights
hereunder or under any FI Security Document with
respect to an Event of Default);
(iii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets
of, deposits with, for the account of or credit
extended by any Bank (except any such reserve requirement
which is reflected in the Adjusted CD Rate);
(iv) impose on any such Bank or the London
Interbank Market any other condition affecting this
Agreement or LIBO Rate Loans or CD Rate Loans made by
such Bank; or
(v) impose upon any Bank any other condition with
respect to any amount paid or to be paid by any Bank
with respect to its LIBO Rate Loans or CD Rate Loans or
this Agreement;
and the result of any of the foregoing shall be to increase
the cost to any Bank of making or maintaining its LIBO Rate
Loans or CD Rate Loans or Commitment hereunder, or to reduce
the amount of any sum (whether of principal, interest or
otherwise) received or receivable by such Bank or to require
such Bank to make any payment, in respect of any such Loan,
in each case by or in an amount which such Bank in its sole
judgment shall deem material, then FI shall pay to such Bank
such an amount or amounts as will compensate the Bank for
such additional cost, reduction or payment.
(c) If any Bank shall have determined that the
applicability of any law, rule, regulation, agreement or
guideline adopted after the Amendment Closing Date pursuant
to or arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement
and Capital Standards", or the adoption after the Amendment
Closing Date of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the
foregoing enacted after the Amendment Closing Date or in the
interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable
agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any lending office of
such Bank) or any Bank's holding company with any request or
directive enacted after the Amendment Closing Date regarding
capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on
such Bank's capital or on the capital of such Bank's holding
company, if any, as a consequence of its obligations hereunder
to a level below that which such Bank or such Bank's
holding company could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's
policies and the policies of such Bank's holding company
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time FI shall
pay to such Bank such additional amount or amounts as will
compensate such Bank or such Bank's holding company for any
such reduction suffered.
(d) If and on each occasion that a Bank makes a
demand for compensation pursuant to paragraph (a), (b) or
(c) above, or under Section 3.18 (it being understood that a
Bank may be reimbursed for any specific amount under only
one such paragraph or Section), FI may, upon at least three
Business Days' prior irrevocable written or telex notice to
each of such Bank and the Agent, in whole permanently
replace the Commitment of such Bank; provided that such
notice must be given not later than the 30th day following
the date of a demand for compensation made by such Bank; and
provided that FI shall replace such Commitment with the
commitment of a commercial bank satisfactory to the Agent.
Such notice from FI shall specify an effective date for the
termination of such Bank's Commitment which date shall not
be later than the tenth day after the date such notice is
given. On the effective date of any termination of such
Bank's Commitment pursuant to this clause (d), FI shall pay
to the Agent for the account of such Bank (A) any Commitment
Fees on the amount of such Bank's Commitment so terminated
accrued to the date of such termination, (B) the principal
amount of any outstanding Loans held by such Bank plus
accrued interest on such principal amount to the date of
such termination and (C) the amount or amounts requested by
such Bank pursuant to clause (a), (b) or (c) above or
Section 3.18, as applicable. FI will remain liable to such
terminated Bank for any loss or expense that such Bank may
sustain or incur as a consequence of such Bank's making any
LIBO Rate Loan or CD Rate Loan or any part thereof or the
accrual of any interest on any such Loan in accordance with
the provisions of this clause (d) as set forth in
Section 3.14. Upon the effective date of termination of any
Bank's Commitment pursuant to this clause (d), such Bank
shall cease to be a "Bank" hereunder; provided that no such
termination of any such Bank's Commitment shall affect
(i) any liability or obligation of FI or any other Bank to
such terminated Bank which accrued on or prior to the date
of such termination or (ii) such terminated Bank's rights
hereunder in respect of any such liability or obligation.
(e) A certificate of each Bank setting forth such
amount or amounts as shall be necessary to compensate such
Bank as specified in paragraph (a), (b) or (c) above, as the
case may be, shall be delivered as soon as practicable to
FI, and in any event within 90 days of the change giving
rise to such amount or amounts, and shall be conclusive
absent manifest error. FI shall pay each Bank the amount
shown as due on any such certificate within 15 days after
its receipt of the same. In preparing such a certificate,
each Bank may employ such assumptions and allocations of costs
and expenses as it shall in good faith deem reasonable.
(f) Failure on the part of any Bank to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital
within the 90 days required pursuant to clause (e) above shall
not constitute a waiver of such Bank's rights to demand
compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital for
any period after the date that is 90 days prior to the date of
the delivery of demand for compensation. The protection of
this Section shall be available to each Bank regardless of any
possible contention of invalidity or inapplicability of the
law, regulation or condition which shall have occurred or been
imposed. FI shall not be required to make any additional
payment to any Bank pursuant to Section 3.12 (a) or (b) in
respect of any such cost, reduction or payment that could be
avoided by such Bank in the exercise of reasonable diligence,
including a change in the lending office of such Bank if
possible without material cost to such Bank. Each Bank agrees
that it will promptly notify FI and the Agent of any event of
which the responsible account officer shall have knowledge
which would entitle such Bank to any additional payment
pursuant to this Section 3.12. FI agrees to furnish promptly
to the Agent official receipts evidencing any withholding or
deduction of any tax.
SECTION 3.13. Change in Legality. (a) Notwithstanding
anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation
thereof by any governmental authority charged with the
administration or interpretation thereof shall make it
unlawful for any Bank to make or maintain any LIBO Rate Loan
or to give effect to its obligations as contemplated hereby,
then, by written notice to FI and to the Agent, such Bank may:
(i) declare that LIBO Rate Loans will not thereafter
be made by such Bank hereunder, whereupon FI shall be
prohibited from requesting LIBO Rate Loans from such Bank
hereunder unless such declaration is subsequently
withdrawn; and
(ii) require that all outstanding LIBO Rate Loans
made by it be converted to Reference Rate Loans, in
which event (A) all such LIBO Rate Loans shall be automatically
converted to Reference Rate Loans as of the effective date of such
notice as provided in paragraph (b) below, (B) all payments and
prepayments of principal which would otherwise have been applied to
repay the converted LIBO Rate Loans shall instead be applied to repay
the Reference Rate Loans resulting from the conversion of such LIBO
Rate Loans and (C) the Reference Rate Loans resulting from the
conversion of such LIBO Rate Loans shall be prepayable only at the
times the converted LIBO Rate Loans would have been prepayable,
notwithstanding the provisions of Section 3.10.
(b) For purposes of Section 3.13(a), a notice to
FI by any Bank shall be effective on the date of receipt by
FTX.
SECTION 3.14. Indemnity. FI shall indemnify each
Bank against any loss or expense which such Bank may sustain
or incur as a consequence of any failure by FI to fulfill on
any Borrowing Date the applicable conditions set forth in
Article VI, any failure by FI to borrow hereunder or to
convert or continue any Loan hereunder after irrevocable
notice of borrowing, continuation or conversion pursuant to
Section 3.4 or 3.11 has been given, any payment, prepayment
(except for any prepayment excluded by the terms of Section
5.1(i)) or conversion of a CD Rate Loan or LIBO Rate Loan to
FI required by any other provision of this Agreement or
otherwise made on a date other than the last day of the
applicable Interest Period (whether by reason of voluntary
prepayment, mandatory prepayment or otherwise), any default
in payment or prepayment of the principal amount of any CD
Rate Loan or LIBO Rate Loan to FI or any part thereof or
interest accrued thereon, as and when due and payable (at
the due date thereof, by irrevocable notice of prepayment or
otherwise, including the occurrence of any Event of
Default), including, but not limited to, any loss or reasonable
expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part
thereof as a CD Rate Loan or LIBO Rate Loan. Such loss or
reasonable expense shall include, without limitation, an
amount equal to the excess, if any, as reasonably determined
by each affected Bank of (i) its cost of obtaining the funds
for the Loan being paid, prepaid or converted or not borrowed,
continued or converted (based on the Absolute Rate,
Adjusted CD Rate or the LIBO Rate applicable thereto) for
the period from the date of such payment, prepayment or
conversion or failure to borrow, continue or convert to the
last day of the Interest Period for such Loan (or, in the
case of a failure to borrow, continue or convert, the
Interest Period for such Loan which would have commenced on
the date of such failure to borrow continue or convert) over
(ii) the amount of interest (as reasonably determined by
such Bank) that would be realized by such Bank in
reemploying the funds so paid, prepaid or converted or not
borrowed, continued or converted by making a Loan of the
same type in such principal amount and with a maturity
comparable to such period. A certificate of any Bank
setting forth any amount or amounts which such Bank is
entitled to receive pursuant to this Section shall be
delivered to FI and shall be conclusive absent manifest
error.
SECTION 3.15. Pro Rata Treatment. Except as
permitted under any of Sections 3.9(b) or (c), 3.12, 3.13,
3.14, 3.18, 3.19 or 10.17, each borrowing under each type of
Loan, each payment or prepayment of principal of the
Promissory Notes, each payment of interest on the Promissory
Notes, each other reduction of the principal or interest
outstanding under the Promissory Notes, however achieved,
including by setoff by any person, each payment of the
Commitment Fees, each reduction of the Commitments and each
continuation or conversion of Loans shall be made pro rata
among the Banks in the proportions that their respective
Commitments bear to the Total Commitment. Each Bank agrees
that in computing such Bank's portion of any borrowing to be
made hereunder, the Agent may, in its discretion, round each
Bank's percentage of such borrowing to the next higher or
lower whole dollar amount.
SECTION 3.16. Sharing of Setoffs. Each Bank
agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim against FI or either
Guarantor, or pursuant to a secured claim under Section 506
of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim,
received by such Bank under any applicable bankruptcy,
insolvency or other similar law (including any Indonesian
law) or otherwise, obtain payment (voluntary or involuntary)
in respect of any Promissory Note held by it as a result of
which the unpaid principal portion of the Promissory Notes
held by it shall be proportionately less than the unpaid
principal portion of the Promissory Notes held by any other
Bank, it shall be deemed to have simultaneously purchased
from such other Bank at face value a participation in the
Promissory Notes held by such other Bank, so that the
aggregate unpaid principal amount of the Promissory Notes
and participations in Promissory Notes held by each Bank
shall be in the same proportion to the aggregate unpaid
principal amount of all Promissory Notes then outstanding as
the principal amount of the Promissory Notes held by it
prior to such exercise of banker's lien, setoff or counterclaim
was to the principal amount of all Promissory Notes
outstanding prior to such exercise of banker's lien, setoff
or counterclaim; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant
to this Section and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment
restored without interest. FI and each Guarantor expressly
consents to the foregoing arrangements and agrees that any
Bank holding a participation in a Promissory Note deemed to
have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any
and all moneys owing hereunder by FI or such Guarantors to
such Bank as fully as if such Bank had made a Loan directly
to FI in the amount of such participation.
SECTION 3.17. Payments. (a) Except as otherwise
provided in this Agreement, all payments and prepayments to
be made by FI or either Guarantor to the Banks hereunder,
whether on account of Commitment Fees, payment of principal
or interest on the Promissory Notes or other amounts at any
time owing hereunder, shall be made to the Agent at its
Domestic Office for the account of the several Banks in
immediately available funds. All such payments shall be
made to the Agent as aforesaid not later than 10:30 a.m.,
New York City time, on the date due; and funds received
after that hour shall be deemed to have been received by the
Agent on the following Business Day.
(b) As promptly as possible, but no later than
2:00 p.m., New York City time, on the date of each borrowing,
each Bank participating in the Loans made on such date
shall pay to the Agent such Bank's Applicable Percentage of
such Loan plus, if such payment is received by the Agent
after 2:00 p.m., New York City time, on the date of such
borrowing, interest at a rate per annum equal to the rate in
effect on such day, quoted by the Agent at its Domestic
Office, for the overnight "sale" to such Bank of Federal
funds. At the time of, and by virtue of, such payment, such
Bank shall be deemed to have made its Loan in the amount of
such payment. The Agent agrees to pay any moneys, including
such interest, so paid to it by the lending Banks promptly,
but no later than 3:00 p.m., New York City time, on the date
of such borrowing, to FI in immediately available funds.
(c) If any payment of principal, interest,
Commitment Fee or any other amount payable to the Banks
hereunder or under any Promissory Note shall fall due on a
day that is not a Business Day, then (except in the case of
payments of principal of or interest on LIBO Rate Loans, in
which case the provisions of Section 3.5 shall apply) such
due date shall be extended to the next succeeding Business
Day, and interest shall be payable on principal in respect
of such extension.
(d) Unless the Agent shall have been notified by
FI prior to the date on which any payment or prepayment is
due hereunder (which notice shall be effective upon receipt)
that FI does not intend to make such payment or prepayment,
the Agent may assume that FI has made such payment or
prepayment when due and the Agent may in reliance upon such
assumption (but shall not be required to) make available to
each Bank on such date an amount equal to the portion of
such assumed payment or prepayment such Bank is entitled to
hereunder, and, if FI has not in fact made such payment or
prepayment to the Agent, such Bank shall, on demand, repay
to the Agent the amount made available to such Bank,
together with interest thereon in respect of each day during
the period commencing on the date such amount was made
available to such Bank and ending on (but excluding) the
date such Bank repays such amount to the Agent, at a rate
per annum equal to the rate, in effect on such day, quoted
by the Agent at its Domestic Office for the overnight "sale"
to the other Banks of Federal funds.
(e) All payments of the principal of or interest
on the Loans or any other amounts to be paid to any Bank,
the Agent or the FI Trustee under this Agreement or any of
the other Loan Documents shall be made in Dollars, without
reduction by reason of any currency exchange expense.
SECTION 3.18. U.S. Taxes. (a) Except as
required by law, any and all payments by FI hereunder shall
be made, in accordance with Section 3.17, free and clear of
and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto imposed by the
United States or any political subdivision thereof,
excluding taxes imposed on the net income of the Agent or
any Bank (or any Transferee) and franchise taxes imposed on
the Agent or any Bank (or Transferee) (all such nonexcluded
taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes").
If as a result of a Change in Tax Law FI shall be required
by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Banks (or any Transferee) or the
Agent, (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 3.18) such Bank (or Transferee) or the
Agent (as the case may be) shall receive an amount equal to
the sum it would have received had no such deductions been
made, (ii) FI shall make such deductions and (iii) FI shall
pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with
applicable law; provided, however, that no Transferee of any
Bank shall be entitled to receive any greater payment under
this Section 3.18 than such Bank would have been entitled to
receive with respect to the rights assigned, participated or
otherwise transferred unless such assignment, participation
or transfer shall have been made at a time when the circumstances
giving rise to such greater payment did not exist.
"Change in Tax Law" means as to each Bank (or
Transferee) the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law
(or in the application or official interpretation of any
law), including an amendment, modification or revocation of
an applicable tax treaty or a change in official position
regarding the application or interpretation thereof,
occurring after the Amendment Closing Date.
(b) Within 30 days after the date of any payment
of Taxes withheld by FI in respect of any payment to any
Bank (or Transferee other than a participation holder) or
the Agent, FI will furnish to the Agent, at its address
referred to on the signature page, the original or a
certified copy of a receipt evidencing payment thereof.
(c) At the time it becomes a party to this
Agreement or a Transferee, each Bank (or Transferee) that is
organized under the laws of a jurisdiction outside the
United States shall deliver to FI such certificates,
documents or other evidence, as required by the Code or
Treasury Regulations issued pursuant thereto, including
Internal Revenue Service Form 1001 or Form 4224 and any
other certificate or statement of exemption required by
Treasury Regulation Section 1.1441-1, 1.1441-4 or 1.1441-6(c)
or any subsequent version thereof or successors
thereto, properly completed and duly executed by such Bank
(or Transferee) establishing that such payment is (i) not
subject to United States Federal withholding tax under the
Code because such payment is effectively connected with the
conduct by such Bank (or Transferee) of a trade or business
in the United States or (ii) totally exempt from United
States Federal withholding tax. Unless FI and the Agent
have received forms or other documents satisfactory to them
indicating that such payments hereunder or under the
Promissory Notes are not subject to United States Federal
withholding tax FI or the Agent shall withhold taxes from
such payments at the applicable statutory rate.
(d) FI shall not be required to pay any
additional amounts to any Bank (or Transferee) in respect of
United States Federal withholding tax pursuant to paragraph
(a) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Bank
(or Transferee) to comply with the provisions of paragraph
(c) above.
(e) Any Bank (or Transferee) claiming any additional
amounts payable pursuant to this Section 3.18 shall
give notice to the Agent and FI within 90 days of the Change
in Tax Law and use reasonable efforts (consistent with legal
and regulatory restrictions) to file any certificate or
document requested by FI to change the jurisdiction of its
applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue and
would not, in the sole determination of such Bank, be
otherwise disadvantageous to such Bank (or Transferee). The
failure of any Bank (or Transferee) to give the required 90
day notice shall excuse FI from its obligation to pay
additional amounts pursuant to this Section 3.18 incurred
prior to the giving of such notice.
(f) Without prejudice to the survival of any
other agreement contained herein, the agreements and obligations
contained in this Section 3.18 and Section 3.19 shall
survive the payment in full of the principal of and interest
on all Loans made hereunder.
SECTION 3.19. Indonesian Taxes. (a) FI shall
pay when due all Indonesian Taxes.
(b) FI shall indemnify the Agent, the FI Trustee
and each Bank (or Transferee) against, and shall reimburse
the Agent, the FI Trustee and each Bank (or Transferee) upon
demand for, any Indonesian Taxes paid by the Agent, the FI
Trustee or such Bank (or Transferee) and any loss,
liability, claim or expense (including interest, penalties,
fines, surcharges and legal fees) which the Agent, the FI
Trustee or such Bank may incur at any time arising out of or
in connection with any failure of FI to make any payments of
Indonesian Taxes when due.
(c) All payments on account of the principal of
or interest on the Loans made to FI, the Promissory Notes of
FI and all other amounts payable by FI to or for the account
of any Bank (or Transferee) or the Agent hereunder
(including amounts payable under Section 3.19(a) or 3.19(b))
or to or for the FI Trustee under the FI Security Documents
and to any of them under any other Loan Document shall be
made free and clear of and without reduction by reason of
any Indonesian Taxes. In the event that FI is required by
any applicable law, decree or regulation to deduct or
withhold Indonesian Taxes from any amounts payable on, under
or in respect of this Agreement or any other Loan Document,
FI shall make the required deduction or withholding,
promptly pay the amount of such Indonesian Taxes to the
appropriate taxing authorities and pay to the Agent such
additional amounts as may be required, after the deduction
or withholding of Indonesian Taxes, to enable each Bank (or
Transferee), the FI Trustee or the Agent to receive from FI
on the due date thereof, an amount equal to the full amount
stated to be payable to such Bank (or Transferee), the FI
Trustee or the Agent under this Agreement or any other
applicable Loan Document.
(d) Without in any way affecting FI's obligations
under the other provisions of this Section 3.19, FI shall
furnish to the Agent the originals or certified copies of
all tax receipts in respect of each payment, deduction or
withholding of Indonesian Taxes required to be made by
applicable laws or regulations, within 45 days after the
date on which each payment under this Agreement or any other
Loan Document subject to Indonesian Taxes is made, and FI
shall, at the request of any Bank (or Transferee), the FI
Trustee or the Agent, promptly furnish to such Bank (or
Transferee), the FI Trustee or the Agent any other
information, documents and receipts that such Bank (or
Transferee), the FI Trustee or the Agent may require to
establish to its satisfaction that full and timely payment
has been made of all Indonesian Taxes required to be paid
hereunder.
(e) FI will notify the Banks (through the Agent)
promptly upon becoming aware of the application or
imposition, or scheduled future application or imposition,
of Indonesian Taxes; and each Bank (if not theretofore
notified by FI) will notify FI of any such application or
imposition which becomes known to its officers then
supervising the Loans of such Bank hereunder as part of
their normal duties, and of any change of its lending office
or establishment or closing of a branch in Indonesia by such
Bank which would give rise to the application or imposition
of Indonesian Taxes.
ARTICLE IV
Representations and Warranties
SECTION 4.1. Representations and Warranties.
(i) FTX represents and warrants with respect to itself and
FRP, (ii) the Guarantors and FI jointly and severally
represent with respect to FI and (iii) the Guarantors
jointly and severally represent with respect to FCX, in each
case to each of the Banks, as follows:
(a) Organization, Powers. Each of FTX, each
Major Subsidiary and FCX (i) is duly organized, validly
existing and in good standing under the laws of the
State of Delaware and, in the case of FI, the laws of
the Republic of Indonesia, (ii) has the requisite power
and authority to own its property and assets (and, in
the case of FI, has the requisite licenses to use real
property not owned) and to carry on its business as now
conducted and as proposed to be conducted, and (iii) is
qualified to do business in every jurisdiction where
such qualification is required, except where the
failure so to qualify would not have a material adverse
effect on its condition, financial or otherwise. Each
of FTX, FI and FCX has the power to execute, deliver
and perform its obligations under this Agreement and
the other Loan Documents to which it is or is to be a
party, and FI has the power to borrow hereunder and to
execute and deliver the Promissory Notes to be
delivered by it. Each of FTX, each Major Subsidiary
and FCX has all requisite corporate power, and has all
material governmental licenses, authorizations, consents
and approvals necessary to own its own assets and
carry on its business as now being or as proposed to be
conducted.
(b) Authorization. The execution, delivery and
performance of this Agreement (including, without
limitation, performance of the obligations set forth in
Section 5.1(h)) and the other Loan Documents to which
it is or is to be, a party and the borrowings hereunder
(i) have been duly authorized by all requisite
corporate and, if required, stockholder action on the
part of FI or the applicable Guarantor, as the case may
be, and (ii) will not (A) violate (x) any Governmental
Rule or the certificate or articles of incorporation or
other constitutive documents or the By-laws or
regulations of such Person or (y) any provisions of any
indenture, agreement or other instrument to which such
Person is a party, or by which such Person or any of
their respective properties or assets are or may be
bound, (B) be in conflict with, result in a breach of
or constitute (alone or with notice or lapse of time or
both) a default under any indenture, agreement or other
instrument referred to in (ii)(A)(y) above or
(C) result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any
property or assets of such Person, except as contemplated
by the Pledge Agreement, the Security Agreement
and the FI Security Documents.
(c) Governmental Approval. Except for those
consents, approvals and registrations listed on
Schedule 4.1(c) hereto, each of which has been obtained
and is in full force and effect, no registration with
or consent or approval of, or other action by, any
Governmental Authority is or will be required in
connection with the execution, delivery and performance
by FI or either Guarantor, as appropriate, of this
Agreement or any other Loan Document to which it is, or
is to be, a party or the borrowings hereunder by FI.
Other than routine authorizations, permissions or
consents 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, financial condition or operations
of any Guarantor or Major Subsidiary, such Person has
all franchises, licenses, certificates, authorizations,
approvals or consents from all national, state and
local governmental and regulatory authorities required
to carry on its business as now conducted and as
proposed to be conducted.
(d) Enforceability. This Agreement and each of
the other Loan Documents to which it is a party
constitutes a legal, valid and binding obligation of FI
and each Guarantor, as applicable, and the Pledge
Agreement, the Security Agreement and each other Loan
Document to be entered into after the Amendment Closing
Date will, upon its execution and delivery, constitute
the legal, valid and binding obligations of FI or such
Guarantor, as applicable, in each case enforceable in
accordance with its respective terms (subject, as to
the enforcement of remedies against such Person, to
applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors' rights
against such Person generally in connection with the
bankruptcy, reorganization or insolvency of such Person
or a moratorium or similar event relating to such
Person).
(e) Financial Statements. FTX has heretofore
furnished to each of the Banks consolidated balance
sheets and statements of income and changes in retained
earnings and cash flow as of and for the fiscal years
ended December 31, 1991 and 1992, all audited and
certified by Arthur Andersen & Co., independent public
accountants, included in FTX's Annual Report on
Form 10-K for the year ended December 31, 1992 (the
"1992 Form 10-K"), and unaudited consolidated balance
sheets and statements of income and cash flow as of and
for the fiscal quarter ended March 31, 1993 included in
FTX's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1993. In addition, FTX has heretofore
furnished to each of the Banks consolidated balance
sheets and statements of income and cash flow for each
Major Subsidiary and FCX as of and for the fiscal years
ended December 31, 1991 and 1992, all audited and
certified by Arthur Andersen & Co and unaudited
consolidated balance sheets and statements of income
and cash flow for each Major Subsidiary and FCX as of
and for the fiscal quarter ended March 31, 1993. All
such balance sheets and statements of income and cash
flow present fairly the financial condition and results
of operations of FTX and the Subsidiaries or of either
Major Subsidiary or FCX, as of the dates and for the
periods indicated. Such financial statements and the
notes thereto disclose all material liabilities, direct
or contingent, of FTX and the Subsidiaries or of either
Major Subsidiary or FCX, as of the dates thereof which
are required to be shown on financial statements
prepared in accordance with GAAP. The financial
statements referred to in this Section 4.1(e) have been
prepared in accordance with GAAP. There has been no
material adverse change since December 31, 1992, in the
businesses, assets, operations, prospects or condition,
financial or otherwise, of (i) FTX, (ii) FRP, (iii) FI,
(iv) FCX or (v) FTX and the Subsidiaries taken as a
whole.
(f) Litigation; Compliance with Laws; etc.
(i) Except as disclosed in the 1992 Form 10-K and any
subsequent reports filed as of 20 days prior to the
Amendment Closing Date with the SEC on Form 10-Q or
Form 8-K which have been delivered to the Banks, there
are no actions, suits or proceedings at law or in
equity or by or before any governmental instrumentality
or other agency or regulatory authority now pending or,
to the knowledge of FTX, threatened against or
affecting FTX or any Subsidiary or the businesses,
assets or rights of FTX or any Subsidiary (i) which
involve this Agreement or any of the other Loan
Documents or any of the transactions contemplated
hereby or thereby or the collateral for the Loans
(including, in the case of FI, the Contract of Work) or
(ii) as to which there is a reasonable possibility of
an adverse determination and which, if adversely determined,
could, individually or in the aggregate, materially
impair the ability of FTX, either Major Subsidiary
or FCX to conduct its business substantially as now
conducted, or materially and adversely affect the
businesses, assets, operations, prospects or condition,
financial or otherwise, of FTX, either Major Subsidiary
or FCX, or impair the validity or enforceability of, or
the ability of FTX, either Major Subsidiary or FCX to
perform its obligations under this Agreement or any of
the other Loan Documents to which such Person is a
party.
(ii) Neither FTX nor any Subsidiary is in
violation of any law, or in default with respect to any
judgment, writ, injunction, decree, rule or regulation
of any court or governmental agency or instrumentality,
where such violation or default could have a materially
adverse effect on the businesses, assets, operations or
condition, financial or otherwise, of FTX, either Major
Subsidiary or FCX. Without limitation of the
foregoing, FTX and each Subsidiary has complied with
all Governmental Rules (including, in the case of FI,
all such requirements under the Contract of Work and
under environmental Governmental Rules of Indonesia)
relating to environmental pollution or to environmental
regulation or control or to employee health or safety
where any such noncompliance could have a materially
adverse effect on the businesses, assets, operations or
condition, financial or otherwise, of FTX, either Major
Subsidiary or FCX. Neither FTX nor any Subsidiary has
received notice of any material failure so to comply.
FTX's and the Subsidiaries' plants do not handle any
hazardous wastes, hazardous substances, hazardous
materials, toxic substances, toxic pollutants or
substances similarly denominated, as those terms or
similar terms are used in the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials
Transportation Act, the Toxic Substance Control Act,
the Clean Air Act, the Clean Water Act or any other
applicable law relating to environmental pollution or
employee health and safety (and, in the case of FI, the
equivalent substances to which the Contract of Work or
the environmental Governmental Rules of Indonesia
apply), in violation of any law or any regulations
promulgated pursuant thereto where any such violation
could have a materially adverse effect on the
businesses, assets, operations or condition, financial
or otherwise, of FTX, either Major Subsidiary or FCX.
FTX is aware of no events, conditions or circumstances
involving environmental pollution or contamination or
employee health or safety that could reasonably be
expected to result in material liability on the part of
FTX or any Subsidiary.
(g) Title, etc. FTX, each Major Subsidiary and
FCX have good and valid title to their respective
material properties, assets and revenues (exclusive of
oil, gas and other mineral properties on which no
development or production activities are being
conducted following discovery of commercially exploitable
reserves), free and clear of all Liens except such
as are permitted by Section 5.2(d) and except for
covenants, restrictions, rights, easements
and minor irregularities in title which do not
individually or in the aggregate interfere with the
occupation, use and enjoyment by FTX or the respective
Subsidiary of such properties and assets in the normal
course of business as presently conducted or materially
impair the value thereof for use in such business and
FI has the requisite licenses under the Governmental
Rules of Indonesia to use the real property on which it
conducts its business.
(h) Federal Reserve Regulations; Use of Proceeds.
(i) Neither FTX nor any Subsidiary is engaged
principally, or as one of its important activities, in
the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(ii) No part of the proceeds of the Loans will be
used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose
which entails a violation of, or which is inconsistent
with, the provisions of the Regulations of the Board,
including, without limitation, Regulations G, U or X
thereof.
(iii) FI will use the proceeds of all Loans made to
it for its general corporate purposes, including the
making of acquisitions.
(iv) As of each date when this representation is
made or deemed made, either FTX (i) owns directly and
beneficially Margin Stock with a current market value
(within the meaning of Regulation U) at least equal to
twice the aggregate amount of credit secured, directly
or indirectly (within the meaning of Regulation U), by
such Margin Stock on such date (after giving effect to
any Credit Event, FTX Credit Event, borrowing pursuant
to the KfW Credit Agreement or Borrowing (as such term
is defined in the FM Credit Agreement) or other
increase in such credit occurring on such date and to
any other obligations secured by such Margin Stock) or
(ii) owns directly and beneficially assets other than
Margin Stock ("Other Collateral") with a current market
value (within the meaning of Regulation U) at least
equal to twice the aggregate amount of credit secured,
directly or indirectly (within the meaning of
Regulation U), by such Other Collateral on such date
(after giving effect to any Credit Event, FI Credit
Event, borrowing pursuant to the KfW Credit Agreement
or Borrowing (as such term is defined in the FM Credit
Agreement) or other increase in such credit occurring
on such date and to any other obligations secured by
such Other Collateral. There are no Liens on such
Margin Stock or such Other Collateral, as the case may
be (other than those created by the Pledge Agreement),
nor is there any Debt or any other obligation (other
than the loans under the FM Credit Agreement, the
Corporate Group Loans, the loans made pursuant to the
KfW Credit Agreement, the Permitted Secured Swaps, the
Pel-Tex Debt and Permitted Swaps (as such terms are
defined in the FM Credit Agreement)) secured, directly
or indirectly (within the meaning of Regulation U), by
such Margin Stock or Other Collateral.
(i) Taxes. FTX and the Subsidiaries have filed
or caused to be filed all Federal, state and local tax
returns and all Indonesian tax returns which are
required to be filed by them, and have paid or caused
to be paid all taxes shown to be due and payable on
such returns or on any assessments received by any of
them, other than any taxes or assessments the validity
of which FTX or any Subsidiary is contesting in good
faith by appropriate proceedings, and with respect to
which FTX or such Subsidiary shall, to the extent
required by GAAP, have set aside on its books adequate
reserves.
(j) Employee Benefit Plans. FTX and each of its
ERISA Affiliates is in compliance in all material
respects with the applicable provisions of ERISA and
the regulations and published interpretations thereunder.
No Reportable Event has occurred with respect to
any Plan as to which FTX or any ERISA Affiliate was
required to file a report with the PBGC, and the
present value of all vested benefit liabilities under
each Plan maintained by FTX or an ERISA Affiliate
(based on those assumptions used to fund such Plan) did
not, as of the last annual valuation date applicable
thereto, exceed by $25,000,000 the value of the assets
of such Plan. Neither FTX nor any ERISA Affiliate has
incurred any Withdrawal Liability that materially
adversely affects the financial condition of FTX and
its ERISA Affiliates taken as a whole. Neither FTX nor
any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA,
and no Multiemployer Plan is reasonably expected to be
in reorganization or to be terminated, where such
reorganization has resulted or can reasonably be
expected to result in an increase in the contributions
required to be made to such Plan that would materially
and adversely affect the financial condition of FTX and
its ERISA Affiliates taken as a whole.
(k) Investment Company Act. Neither FTX nor any
Subsidiary is an "investment company" as defined in, or
subject to regulation under, the Investment Company Act
of 1940.
(l) Public Utility Holding Company Act. Neither
FTX nor any Subsidiary is a "holding company", or a
"subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as
amended.
(m) Subsidiaries. Schedule I constitutes a
complete and correct list, as of the Amendment Closing
Date or the date of any update thereof required by Section
5.1(a)(6), of all Restricted Subsidiaries with at
least $1,000,000 in total assets, indicating the
jurisdiction of incorporation or organization of each
corporation or partnership and the percentage of shares
or units owned on such date directly or indirectly by
FTX in each. FTX owns on such date, free and clear of
all Liens, the percentage of voting shares or partnership
interests outstanding of the Subsidiaries shown on
Schedule I, and all such shares or partnership interests
are validly issued and fully paid.
(n) Assigned Agreements. Schedule 4.1(n) is a
complete and correct list, as of the Amendment Closing
Date, of each Long-Term Concentrate Sales Agreement
(copies of which have heretofore been furnished to the
Agent). FI is not in default in any material respect
in its obligations under any Assigned Agreement nor is
any counterparty to any such agreement in default in
its obligations in any respect that could materially
and adversely affect the ability of FI to perform its
obligations under the Corporate Group Facility.
(o) FI Security Documents. The Liens created by
the FI Security Documents are in full force and effect
and constitute first priority (except for Liens
expressly permitted by Section 5.2(d), perfected
security interests in favor of the FI Trustee for the
benefit of the Banks in the property and assets stated
to be subject to each such FI Security Document.
(p) No Material Misstatements. No information,
report (including any Borrowing Base Certificate and
any exhibit, schedule or other attachment thereto or
other document delivered in connection therewith),
financial statement, exhibit or schedule prepared or
furnished by FI or FTX to the Agent, any Bank or the FI
Trustee in connection with this Agreement or any of the
other Loan Documents or included therein contained or
contains any material misstatement of fact or omitted
or omits to state any material fact necessary to make
the statements therein, in the light of the circumstances
under which they were made, not misleading.
ARTICLE V
Covenants
SECTION 5.1. Affirmative Covenants of FTX. So
long as any Bank shall have any Loan Exposure or any
commitment to make a Loan hereunder, FTX agrees that, unless
the Required Banks shall have otherwise consented in
writing:
(a) Financial Statements, etc. FTX shall furnish
each Bank:
(1) within 95 days after the end of each
fiscal year of FTX, a consolidated balance sheet
of FTX and its Subsidiaries, of each Major
Subsidiary and of FCX as at the close of such
fiscal year and consolidated statements of income
and changes in retained earnings or partners'
capital and cash flow of FTX and the Subsidiaries,
of each Major Subsidiary and of FCX for such year,
with the opinion thereon of Arthur Andersen & Co.
or other independent public accountants of
national standing selected by FTX;
(2) within 50 days after the end of each of
the first three quarters of each fiscal year of
FTX, a consolidated balance sheet of FTX and its
Subsidiaries, of each Major Subsidiary and of FCX
as at the end of such quarter and consolidated
statements of income of FTX and the Subsidiaries,
of each Major Subsidiary and of FCX for such
quarter and for the period from the beginning of
the fiscal year to the end of such quarter,
certified by the Treasurer or other authorized
financial or accounting officer of FTX;
(3) promptly after their becoming available,
(a) copies of all financial statements, reports
and proxy statements which FTX, either Major
Subsidiary or FCX shall have sent to its stockholders
generally, (b) copies of all registration
statements (excluding registration statements
relating to employee benefit plans) and regular
and periodic reports, if any, which FTX, either
Major Subsidiary or FCX shall have filed with the
SEC, or any governmental agency substituted
therefor, and (c) if requested by any Bank, copies
of each annual report filed with any governmental
agency pursuant to ERISA with respect to each Plan of
FTX or any of the Subsidiaries;
(4) within 95 days after the end of each
fiscal year of FTX, a certificate by the Treasurer
or other authorized Financial Officer of FTX, to
the effect that no Event of Default or Default has
occurred and is continuing, or if any Event of
Default or Default has occurred and is continuing,
describing the same in reasonable detail;
(5) promptly upon the occurrence of any
Termination Event, Event of Default, or any
material default in the performance of any of its
agreements containeduineSectiona5.1dora5.2,uther any other Loan
Document (other than the FTX Credit Agreement), or
the commencement of any proceeding regarding FTX
or any Subsidiary under any Federal or state
bankruptcy law, notice thereof, describing the
same in reasonable detail;
(6) at the time of provision of the financial
statements referred to in clauses (1) and (2)
above, an update of Schedule I to correct, add or
delete any required information;
(7) all the financial statements and other
documents required to be furnished to the
FTX Lenders pursuant to Section 4.1(a) of the
FTX Credit Agreement and, so long as the guarantee
by FTX of FM Properties' obligations under the FM
Credit Agreement is in effect, all the financial
statements and other documents required to be
furnished to the FM Lenders pursuant to Section
4.1(a) of the FM Credit Agreement; provided,
however, that FTX shall not be required to furnish
duplicate copies of such financial statements or
other documents to Banks which are also
FTX Lenders or FM Lenders, as applicable; and
(8) from time to time, such further information
regarding the business, affairs and financial
condition of FTX or any Subsidiary as any Bank may
reasonably request.
At the time FTX furnishes financial statements pursuant
to the foregoing clauses (1) and (2), FTX will also
furnish each Bank a certificate by the Treasurer or
other authorized Financial Officer of FTX setting forth
the calculation of: (a) the current ratios as
determined in accordance with Section 5.2(e), (b) the
fixed charge ratios as determined in accordance with
Section 5.2(f), (c) the Cash Flow Ratio, (d) if the
Facility is then an HLT, the calculation of the ratio
set forth in Section 5.2(q) and (e) the Available
Borrowing Base; provided that the Cash Flow Ratio shall
be provided within 50 days of the end of each fiscal
quarter.
(b) Taxes and Claims. FTX shall, and shall cause
each Subsidiary to, pay and discharge all taxes,
assessments and governmental charges or levies,
including Indonesian Taxes, imposed upon it or upon its
income or profits, or upon any property belonging to
it, prior to the date on which material penalties
attach thereto; provided that neither FTX nor any
Subsidiary shall be required to pay any such tax,
assessment, charge or levy, the payment of which is
being contested in good faith by proper proceedings and
with respect to which FTX or such Subsidiary shall
have, to the extent required by GAAP, set aside on its
books adequate reserves.
(c) Maintenance of Existence; Conduct of Business.
FTX shall, and shall cause each Major Subsidiary
and FCX to, preserve and maintain its corporate
existence and all its rights, privileges and franchises
necessary or desirable in the normal conduct of its
business; provided that nothing herein shall prevent
any transaction permitted by Section 5.2(c).
(d) Compliance with Applicable Laws. FTX shall,
and shall cause each Subsidiary to, comply with the
requirements of all applicable laws, rules, regulations
and orders of any Governmental Authority, a breach of
which would materially and adversely affect the
consolidated financial condition or business of FTX,
either Major Subsidiary or FCX, except where contested
in good faith and by proper proceedings and with
respect to which FTX or such Subsidiary shall have, to
the extent required by GAAP, set aside on its books
adequate reserves.
(e) Litigation. FTX shall promptly give to each
Bank notice in writing of all litigation and all
proceedings before any governmental or regulatory
agencies or arbitration authorities affecting FTX or
any Subsidiary, except those which, if adversely
determined, do not relate to the Loan Documents and
which would not have a material adverse effect on the
business, assets, operations or financial condition of
any Guarantor or Major Subsidiary or the ability of FI
or either Guarantor to comply with their obligations
under the Loan Documents.
(f) ERISA. FTX shall, and shall cause each
Subsidiary to, comply in all material respects with the
applicable provisions of ERISA and furnish to the Agent
(i) as soon as possible, and in any event within
30 days after any Responsible Officer of FTX or any
ERISA Affiliate knows or has reason to know that any
Reportable Event with respect to any Plan has occurred
that alone or together with any other Reportable Event
with respect to the same or another Plan could reasonably
be expected to result in liability of FTX to the
PBGC in an aggregate amount exceeding $10,000,000, a
statement of a Financial Officer of FTX setting forth
details as to such Reportable Event and the action that
FTX proposes to take with respect thereto, together
with a copy of the notice of such Reportable Event, if
any, given to the PBGC, (ii) promptly after receipt
thereof, a copy of any notice FTX or any ERISA
Affiliate may receive from the PBGC relating to the
intention of the PBGC to terminate any Plan or Plans or
to appoint a trustee to administer any such Plan,
(iii) within 10 days after a filing with the PBGC
pursuant to Section 412(n) of the Code of a notice of
failure to make a required installment or other payment
with respect to a Plan, a statement of a Financial
Officer of FTX setting forth details as to such failure
and the action that FTX proposes to take with respect
thereto, together with a copy of such notice given to
the PBGC and (iv) promptly and in any event within 30
days after receipt thereof by FTX or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, a
copy of each notice received by FTX or any ERISA
Affiliate concerning the imposition of Withdrawal
Liability by a Multiemployer Plan.
(g) [Intentionally left blank]
(h) Security. (i) FI at all times shall comply
with the provisions of the FI Security Documents and
maintain in full force and effect all the rights,
powers and benefits of the FI Trustee under the FI
Security Documents in accordance with their terms,
including (x) the validity and effectiveness of the
powers of attorney granted by the Surat Kuasa and the
Fiduciary Power and the fiduciary transfers effectuated
by the Fiduciary Transfer and the Fiduciary Assignment
and (y) maintenance of the security interest of the FI
Trustee in the collateral required to be subjected to
the Liens created by the FI Security Documents as a
perfected first priority security interest as provided
therein; and
(ii) in the event (A) the aggregate principal
amount of outstanding Corporate Group Loans exceeds for
a period of 20 or more consecutive days the Available
Borrowing Base, (B) an Event of Default shall occur and
continue for a period of 20 or more consecutive days,
or (C) any of the FM Lenders, the Pel-Tex Lenders or
the FTX Lenders shall receive or be entitled to receive
and have requested receipt of security or liens in or
on any property of FTX or any of its Subsidiaries
(other than the initial mortgages and security
interests granted by FTX pursuant to Section 5.1(d) of
the FM Credit Agreement and any security interests
granted by FI to the FTX Lenders) as security for any
amount owing under the FM Credit Agreement, the Pel-Tex
Agreements or the Pel-Tex Bank Agreement or the FTX
Credit Agreement, FTX and each of its wholly-owned
Restricted Subsidiaries (other than FRP, FCX and FI and
any Subsidiary of any of them) shall, subject to the
FTX Intercreditor Agreement, provide the Banks, as
security for the amounts owed by FTX hereunder, with
the same security interests and pledges, in each case
upon the same terms, as are provided by FTX and its
wholly-owned Restricted Subsidiaries to the FTX
Lenders, as set forth in Section 5.1(h)(ii)(ii) of the
FTX Credit Agreement.
(i) Insurance. FTX and each Restricted
Subsidiary shall (i) keep its insurable properties
adequately insured at all times; (ii) maintain such
other insurance, to such extent and against such risks,
including fire, flood and other risks insured against
by extended coverage, as is customary with companies in
the same or similar businesses; (iii) maintain in full
force and effect public liability insurance against
claims for personal injury or death or property damage
occurring upon, in, about or in connection with the use
of any properties owned, occupied or controlled by it
in such amount as it shall reasonably deem necessary;
and (iv) maintain such other insurance as may be
required by law. The proceeds of any political risk
insurance of FCX shall be applied promptly to the
prepayment of the Loans of FI and the Loans pursuant to
the FI Credit Agreement (it being understood that the
allocation of such prepayments among such Loans shall
be determined solely by FCX). Prepayments pursuant to
this Section 5.1(i) shall not be subject to
Section 3.14 unless the occurrence that entitles FCX to
such insurance proceeds results in an Event of Default.
(j) Access to Premises and Records. FTX and each
Subsidiary shall maintain financial records in accordance
with GAAP, and, at all reasonable times and as
often as any Bank may reasonably request, permit
representatives of any Bank to have access to its
financial records and its premises and to the records
and premises of any of its subsidiaries, if any, and to
make such excerpts from such records as such representatives
deem necessary and to discuss its affairs,
finances and accounts with its officers and its independent
certified public accountants or other parties
preparing consolidated or consolidating statements for
it or on its behalf.
(k) FI Security Arrangements. FI will
(i) promptly assign all Long-Term Concentrate Sales
Agreements and the proceeds from all FI Receivables
Purchase Agreements in effect from time to time to the
FI Trustee under, and in accordance with, Article III
of the FI Trust Agreement and (ii) furnish to the Agent
and each Bank copies of each Long-Term Concentrate
Sales Agreement and FI Receivables Purchase Agreement
entered into after the Amendment Closing Date, and each
amendment, waiver or supplement to any Concentrate
Sales Agreement which after such amendment, waiver or
supplement would be a Long-Term Concentrate Sales
Agreement, in each case promptly after the execution
and delivery thereof. FI may permit Long-Term
Concentrate Sales Agreements to expire or terminate in
accordance with their terms.
(l) Protection of Contract Rights. FI will not
terminate, suspend, amend or grant waivers of any
provisions of any of the Assigned Agreements or the FI
Security Documents without the prior written consent of
the Required Banks; provided, however, that FI may
amend or waive provisions in any Concentrate Sales
Agreement so long as such amendment or waiver will not
materially adversely affect the business, financial
condition or operations of FI or any rights of the FI
Trustee or the Banks. FI will promptly furnish to the
Banks and the Agent copies of any amendments to or
waivers or supplements of the Assigned Agreements and
the FI Security Documents. FI shall take all steps
necessary or advisable to protect its rights (and the
rights of the FI Trustee) under the Assigned Agreements
and FI Security Documents.
(m) Source of Interest. FI (i) will conduct
business so that interest paid on the Loans of FI to
any Bank (or Transferee) which is not a "related
person" to FTX within the meaning of
Section 861(c)(2)(B) of the Code as in effect on the
Amendment Closing Date will be deemed to be income from
sources without the United States within the meaning of
Sections 861(a)(1)(A) and 861(c) of the Code as in
effect on the Amendment Closing Date and (ii) will use
its best efforts (without undue cost) to conduct
business so that interest paid on the Loans of FI to
any Bank (or Transferee) which is not a related person
to FTX within the meaning of Section 861(c)(2)(B) of
the Code (as it may be amended or substituted after the
Amendment Closing Date) will be deemed to be income
from sources without the United States within the
meanings of Sections 861(a)(1)(A) and 861(c) of the
Code (as it may be amended or substituted after the
Amendment Closing Date).
(n) Further Assurances. FI and the Guarantors
shall, and shall cause its Subsidiaries to, execute any
and all further documents, financing statements,
agreements and instruments, and take all further
actions (including filing Uniform Commercial Code
financing statements and any Indonesian equivalents),
which may be required under applicable law, or which
the Required Banks, the Agent or the FI Trustee may
reasonably request, in order to effectuate the
transactions contemplated by this Agreement and the FI
Security Documents and in order to grant, preserve,
protect and perfect the validity and first priority of
the security interests created by the FI Security
Documents and, if and when executed, the Security
Agreement and the Pledge Agreement.
(o) Covenants regarding FI and FCX. FTX shall
cause FI and FCX to perform its covenants set forth in
Section 5.3.
SECTION 5.2. Negative Covenants of FTX. So long
as any Bank shall have any Loan Exposure or any commitment
to make a Loan hereunder, FTX agrees that, without the prior
written consent of the Required Banks:
(a) Conflicting Agreements. FTX shall not and
shall cause its Restricted Subsidiaries not to enter
into any agreement (other than this Agreement, the FTX
Credit Agreement and the KfW Credit Agreement)
containing any provision which would be violated or
breached by the performance of their obligations under
any Loan Document or under any instrument or document
delivered or to be delivered by them hereunder or
thereunder or in connection herewith or therewith,
including any agreement with any persons which would
prohibit or restrict (i) in the case of the Restricted
Subsidiaries, the payments of dividends or other
distributions (other than restrictions existing on the
Amendment Closing Date) or (ii) the ability of such
entities to create Liens on any of their assets (other
than assets which are subject to Liens permitted
pursuant to paragraphs (ii), (iii), (iv), (vi) , (vii)
and (viii) of Section 5.2(d) and extensions and
renewals and replacements thereof permitted pursuant to
Section 5.2(d)(xii)).
(b) Borrowing Base Limits. Except to the extent
expressly permitted by Section 2.4 of the FTX Credit
Agreement or Section 3.10(c), FTX shall not at any time
permit the sum of the Corporate Group Loan Exposure and
all Borrowing Base Debt to exceed the then effective
Borrowing Base.
(c) Consolidation or Merger; Disposition of
Assets and Capital Stock. FTX shall not, and shall not
permit any Restricted Subsidiary to, merge into or
consolidate with any corporation, or sell, lease,
transfer or otherwise dispose of all or any substantial
part of the assets of FTX or of any Restricted
Subsidiary, including, without limitation, the rights
of FI under the Contract of Work (except for (u) the
IMC-Agrico Transfer and investments permitted by
Section 5.2(r), (v) the ALatief-FI Transfer and
investments permitted by Section 5.2(s), the Power
Facilities Transfer and the transfer in respect of
Contract Area Block B referred to in Section 8.1(i),
(w) dispositions of accounts receivable, Permitted
Investments and inventory in the ordinary course of
business, provided that the proceeds of any sale of
accounts receivable by FI are deposited in the Sales
Proceeds Account (as defined in the FI Trust
Agreement), (x) dispositions of obsolete or worn-out
property, or real estate not used or useful in its
business, (y) subject to the last sentence of
Section 5.2(j) and to Sections 5.2(o) and (p),
dispositions of assets by FTX or a Restricted
Subsidiary to another Restricted Subsidiary or FTX and
subject to Section 5.2(l), dispositions of assets by a
Restricted Subsidiary to a Nonrestricted Subsidiary;
provided, however, that any Person through which FRP
owns any interest in IMC-Agrico shall at all times be a
Restricted Subsidiary, and (z) to the extent permitted
by Section 5.2(q), the payment of cash dividends by FTX
or any Restricted Subsidiary and dividends by FTX
consisting of stock or units of the Subsidiaries),
whether now owned or hereafter acquired; except that:
(i) FTX or any Restricted Subsidiary may
merge or liquidate any corporation (other than, in
the case of a Restricted Subsidiary, any Guarantor
or Major Subsidiary) into itself;
(ii) any Restricted Subsidiary (other than
FCX and either Major Subsidiary) may be merged
into any other corporation; provided that such
corporation, immediately following such merger,
shall be deemed a Restricted Subsidiary; and
(iii) subject to the last sentence of
Section 5.2(j), FTX or any Restricted Subsidiary
may sell or otherwise dispose of any assets or
securities of any Subsidiary; provided, however,
that the gross fair market value of the
consideration or other amounts payable to or
receivable by FTX or such Restricted Subsidiary
with respect to such sales or other dispositions
is deemed to be Net Proceeds;
provided, however, that in the case of a merger permitted
by clause (i) above, immediately thereafter and
giving effect thereto, FTX or, as the case may be, a
Restricted Subsidiary would be the surviving corporation
and, in the case of a merger permitted by
clause (i) or clause (ii) above or of any disposition
of assets or securities permitted by clause (iii)
above, no Default or Event of Default would,
immediately thereafter and giving effect thereto, have
occurred and be continuing. Each sale or other
disposition permitted by clause (iii) above shall be
permitted only if FTX or the respective Restricted
Subsidiary shall receive fair consideration therefor,
as determined by the Board of Directors of FTX or of
such Restricted Subsidiary, as the case may be. It is
understood and agreed that no transaction pursuant to a
Deemed Lease shall be considered a disposition of
assets within the meaning of this Section 5.2(c).
(d) Liens. FTX shall not, nor shall it permit
any Restricted Subsidiary to, create or suffer to exist
any Lien upon any of its respective properties,
revenues or assets, now owned or hereafter acquired,
securing any indebtedness or obligation, except:
(i) materialmen's, suppliers', tax and other
like Liens arising in the ordinary course of FTX's
or such Restricted Subsidiary's business securing
obligations which are not overdue or are being
contested in good faith by appropriate proceedings
and as to which adequate reserves have been set
aside on its books to the extent required by GAAP,
Liens arising in connection with workers'
compensation, unemployment insurance and progress
payments under government contracts, and other
Liens incident to the ordinary conduct of FTX's or
such Restricted Subsidiary's business or the
ordinary operation of property or assets and not
incurred in connection with the obtaining of any
Debt or Guarantee;
(ii) Liens on assets or properties not owned
as of the Amendment Closing Date by FTX or any
Restricted Subsidiary securing only Debt of FTX or
any such Restricted Subsidiary that is otherwise
without recourse to FTX or any such Restricted
Subsidiary or any of its or their properties or
assets; provided, however, that FTX complies with
Section 5.2(g)(v);
(iii) Liens, existing at the time of the
acquisition by FTX or any Restricted Subsidiary of
the majority of the capital stock or all the
assets of any other corporation or existing at the
time of the merger of any such corporation into
FTX or a Restricted Subsidiary, on such capital
stock or assets so acquired or on the assets of
the corporation so merged into FTX or such
Restricted Subsidiary; provided, however, that
such acquisition or merger (and the discharge of
such Liens referred to in the immediately
succeeding proviso) shall not otherwise result in
an Event of Default or Default; and provided
further that all such Liens shall be discharged
within 180 days after the date of the respective
acquisition or merger;
(iv) Liens securing Debt referred to in
Section 5.2(g)(x);
(v) Liens in favor of the Agent or the Banks
or in favor of the Collateral Agent as provided in
the FTX Intercreditor Agreement, Liens in favor of
the Pel-Tex Lenders as permitted by the FTX
Intercreditor Agreement, Liens, if any, in favor
of the FTX Agent or the FTX Lenders or in favor of
the Collateral Agent as provided in the FRP
Security Agreement, the FRP Pledge Agreement, the
FRP Subsidiary Security Agreement or the FRP
Subsidiary Pledge Agreement, each as defined in
the FTX Credit Agreement and Liens in favor of the
Banks, the FTX Lenders, and the FI Trustee under
the FI Security Documents, all as contemplated by
Section 5.1(h) of the FTX Credit Agreement;
(vi) Liens listed on Schedule 5.2(d) hereto
securing obligations of FTX or a Restricted
Subsidiary under Deemed Leases;
(vii) Liens securing the Debt referred to in
paragraphs (iv), (v), (viii) and (ix) of
Section 5.2(g);
(viii) Liens of lessors of property (in such
capacity) leased by FTX or a Restricted Subsidiary
pursuant to an Operating Lease, which Lien is
limited to the property leased thereunder;
(ix) the reciprocal collateral mortgages
granted by FRP on its interests in Main Pass 299
sulphur and oil and gas interests to its joint
venture partners;
(x) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and
other similar encumbrances incurred in the
ordinary course of business which, in the
aggregate, are not substantial in amount and do
not materially detract from the value of the
property subject thereto or interfere with the
ordinary conduct of the business of FTX or any of
its Subsidiaries;
(xi) Liens securing Permitted Secured Swaps
between FI and any Bank; and
(xii) extensions, renewals and replacements
of Liens referred to in paragraphs (i), (ii),
(iv), (vii), (viii), (ix), (x) and (xi) of this
Section 5.2(d); provided that any such extension,
renewal or replacement Lien shall be limited to
the property or assets covered by the Lien
extended, renewed or replaced and that the
obligations secured by any such extension, renewal
or replacement Lien shall be in an amount not
greater than the amount of the obligations secured
by the Lien extended, renewed or replaced.
(e) Current Ratios. FTX shall not fail to
maintain, as of the last day of each fiscal quarter,
consolidated current assets of FTX and its consolidated
Subsidiaries (other than Nonrestricted Subsidiaries but
including minority interests) in an amount at least
equal to the amount of consolidated current liabilities
of FTX and its consolidated Subsidiaries (other than
Nonrestricted Subsidiaries but including minority
interests) and each Major Subsidiary shall not fail to
maintain (on an individual, stand alone basis), on the
last day of each fiscal quarter, consolidated current
assets of it and its consolidated Subsidiaries (other
than Nonrestricted Subsidiaries but including minority
interests) at least equal to the amount of consolidated
current liabilities of it and its consolidated Subsidiaries
(other than Nonrestricted Subsidiaries but
including minority interests). For purposes hereof,
consolidated current assets and consolidated current
liabilities shall be determined in accordance with
GAAP, except that (i) investments in shares of corporations
(excluding shares which are, and which are held
as, marketable securities) and advances to Nonrestricted
Subsidiaries and other firms or companies in
which FTX has a material investment, direct or
indirect, or which have a direct or indirect material
investment in FTX, shall not be included in current
assets; (ii) current assets shall be increased by the
portion of the Unused Net Commitment Amount which,
under the terms of the Corporate Group Facility, will,
if not sooner terminated or drawn down by FI or any
Borrower (as defined in the FTX Credit Agreement),
remain outstanding for at least twelve months following
the time of determination; provided that if such
availability is required by any Borrower (as defined in
the FTX Credit Agreement) to comply with Section 5.2(e)
of the FTX Credit Agreement, such availability will be
considered to be a utilization of the Commitments (and
consequently unavailable to FI for purposes of this
paragraph (e)); and (iii) the current portion of long-term
Debt shall not be included in current liabilities.
(f) Fixed Charge Ratios. FTX and each Major
Subsidiary shall not permit its respective Fixed Charge
Ratio to be less than 1.25 to 1.00 at the end of any
fiscal quarter.
(g) Debt. Neither FTX nor any Restricted
Subsidiary shall incur, create, assume or permit to
exist any Debt of any of them except:
(i) (A) up to $373,000,000 aggregate principal
amount of FTX's 6.55% Convertible
Subordinated Notes Due 2001;
(B) $150,000,000 aggregate principal amount
of FTX's 10-7/8% Senior Subordinated Debentures
due 2001;
(C) $750,000,000 aggregate face amount of
FTX's Zero Coupon Convertible Subordinated
Debentures Due 2006.
(D) $1,035,000,000 aggregate face amount of
FCX's Liquid Yield Option Notes due 2011 (Zero
Coupon Subordinated Exchangeable Notes, "LYONS")
or, subject to Section 2.2(IV) of the FTX Credit
Agreement, unsecured refinancings thereof not
involving an increase in the aggregate principal
amount over the then accreted principal amount of
the LYONS outstanding;
(E) up to $75,000,000 aggregate principal
amount outstanding pursuant to the KfW Credit
Agreement; and
(F) up to $800,000,000 aggregate principal
amount outstanding pursuant to the FTX Credit
Agreement.
(ii) (A) Debt of FTX owing to a Subsidiary,
provided that such Debt is subordinated to the
Loans on the terms of Exhibit A hereto if the
original term of such Debt is in excess of six
months or could be extended at the option of FTX
beyond six months from the original date of such
Debt;
(B) Debt of a Major Subsidiary owing to FTX
so long as FTX does not have any Loans outstanding
(whether made before or after the incurrence of
Debt by such Major Subsidiary);
(C) subject to Sections 5.2(o) and (p), Debt
of FI owing to FCX or FCX owing to FI; and
(D) subject to Sections 5.2(o) and (p), Debt
of a Restricted Subsidiary other than a Major
Subsidiary owing to FTX or any other Restricted
Subsidiary;
(iii) Debt incurred by FTX in any amount and
Debt incurred by each Major Subsidiary not in
excess of $30,000,000 in the aggregate for such
Major Subsidiary, in each case pursuant to
commercial paper or uncommitted lines of credit
with commercial banks having a maturity of less
than six months;
(iv) purchase money indebtedness of FTX and
any Restricted Subsidiary incurred in the ordinary
course of business;
(v) Debt of FTX and any Restricted Subsidiary
secured by Liens described in Section 5.2(d)(ii)
that is otherwise nonrecourse to FTX and each
Restricted Subsidiary if not less than 20 days
prior to the date such Debt is incurred, created
or assumed FTX or such Restricted Subsidiary
delivers to the Required Banks the terms of such
Debt relating to the nonrecourse nature of such
Debt and the Required Banks have not, on or prior
to such date, given written notice to FTX or such
Restricted Subsidiary of their objection thereto;
(vi) Indebtedness for Borrowed Money (other
than Guarantees and Capitalized Leases) of FTX
that is subordinated to the Loans and FTX's
guarantee pursuant to Section 9.1 if (A) 30 days
prior to the incurrence of such Indebtedness for
Borrowed Money, FTX delivers to each Bank the
terms of the subordination provisions governing
such Indebtedness for Borrowed Money, (B) FTX has
not, prior to such incurrence, received notice
that Banks having Commitments (as defined in the
FTX Credit Agreement) representing at least 33-1/3%
of the aggregate Commitments under and as
defined in the FTX Credit Agreement have objected
to such subordination provisions and (C) such
Indebtedness for Borrowed Money has a maturity
date of not less than ten years, with no scheduled
repayments or amortization for at least ten years
after such Indebtedness for Borrowed Money is
incurred;
(vii) Guarantees by FTX or any Restricted
Subsidiary of (A) Debt (other than non-recourse
Debt referred to in Section 5.2(g)(v)) or
obligations of a Restricted Subsidiary or (B) Debt
or obligations of Nonrestricted Subsidiaries or
any other Person to the extent permitted by
paragraphs (l), (r) and (s) of this Section 5.2;
(viii) Capitalized Leases (including those
resulting from sale and leaseback transactions) of
FTX or any Restricted Subsidiary if at least
30 days prior to entering into any such
Capitalized Lease, FTX or such Restricted
Subsidiary delivers to each Bank the terms thereof
and, in the case of FI (i) such Capitalized Leases
are in connection with financings of the port
facility, power plants, aircraft, ships,
infrastructure assets or vehicles and (ii) the
aggregate amount of any Capitalized Leases of FI
in connection with financings of vehicles is not
in excess of $25,000,000; and
(ix) recourse liability of FTX or any
Restricted Subsidiary in connection with the sale
of accounts receivable by FTX or such Restricted
Subsidiary, as the case may be; provided, however,
that such recourse liability shall not be in
excess of the sales price of the receivables so
sold and, in the case of a sale of accounts
receivable by FI, the proceeds of such sale are
deposited in the Sales Proceeds Account in
accordance with Article III of the FI Trust
Agreement; and
(x) other Debt not referred to in paragraphs (i) through
(ix) of this Section 5.2(g), in an aggregate principal
amount not exceeding $50,000,000.
(h) [Intentionally left blank.]
(i) Convertible Debt Payments. FTX may not make
any payment on the Debt referred to in Section
5.2(g)(i)(A) and (C) except (x) in common stock of
FTX with cash payment for fractional shares and (y)
otherwise in an aggregate amount not in excess of
$15,000,000.
(j) Ownership of Subsidiaries. FTX shall not at
any time directly or indirectly own shares or units of
voting stock or interests having less than (x) 40%
ownership interest in each of FRP and FI, (y) 50.1%
ownership interest in FCX and (z) such voting power as
provides effective control of the policy and direction
of FRP, FCX and FI. FCX shall not at any time directly
or indirectly own shares of voting stock or interests
having less than 50.1% ownership interest in FI,
including, so long as Section 4(c) of the Indocopper
Shareholders Agreement and the definitions related
thereto are in effect and have not been amended, shares
of voting stock or interests held through P.T.
Indocopper Investama Corporation. FTX shall own its
interests in FRP, FCX and FI, and FCX shall own its
interests in FI, free and clear of all Liens, except as
contemplated by Section 5.1(h). FTX shall promptly
notify the Agent in the event there occurs any
significant decrease in its or FCX's percentage
ownership of such voting power below that indicated in
the most recent Borrowing Base Certificate or, in the
case of its ownership, any decrease in such percentage
interest below 50%. The ownership by FTX of equity
interests in FRP shall be direct and not through any
intervening entity. The ownership by the Guarantors of
common stock of FI shall be direct and not through any
intervening entity, except for the percentage of common
stock held by FCX on the Amendment Closing Date through
P. T. Indocopper Investama Corporation. FTX shall at
no time permit any significant percentage of the assets
of either Major Subsidiary or FCX to be transferred to
another Subsidiary which is not a Restricted Subsidiary
directly owned by FTX; provided, however, that the
foregoing shall not prohibit the IMC-Agrico Transfer,
the ALatief-FI Transfer, the Power Facilities Transfer
or the transfer referred to in Section 8.1(i) in
respect of Contract Area Block B.
(k) Fiscal Year. FTX shall not change its fiscal
year to end on any date other than December 31.
(l) Investments in Nonrestricted Subsidiaries and
Persons Not Subsidiaries. FTX and the Restricted
Subsidiaries shall not make or permit to exist (x) any
Guarantee by FTX or a Restricted Subsidiary of the Debt
of any Person which is not a Restricted Subsidiary or
(y) any loans or advances to, or purchase any stock,
other securities or evidences of indebtedness of, or
permit to exist any investment (whether by transfer of
assets or otherwise) or acquire any investment
whatsoever in or make any Guarantee with respect to any
such loans, advances, purchases, investments or
acquisitions of interest made by any Person with
respect to, or any other payment for the benefit of,
any Nonrestricted Subsidiaries the aggregate outstanding
amount of which under this clause (y) and
Guarantees under clause (x) at any time exceeds by more
than $50,000,000 the largest aggregate amount thereof
outstanding at any time in the next preceding fiscal
year of FTX; provided that, notwithstanding the
provisions of clauses (x) and (y) above, FTX may (i)
Guarantee the FM Properties Indebtedness and, so long
as no Default or Event of Default shall have occurred
and be continuing (or would result thereupon), make
advances, loans and equity contributions to FM
Properties, (ii) Guarantee obligations of FM Properties
pursuant to any Permitted Swap (as defined in the FM
Credit Agreement) provided that such Guarantee is
granted on the same terms as FTX's Guarantee of the
FM Properties Indebtedness, (iii) consummate the
ALatief-FI Transfer and consummate Guarantees of
ALatief-FI's initial financing as permitted pursuant to
Sections 5.2(s)(i) and 5.2(s)(vii) and (iv) make
investments as permitted under Section 5.2(r), all of
which shall not be included in the calculation above
regarding the prohibition on investments in
Nonrestricted Subsidiaries and other entities in excess
of $50,000,000 of the preceding year's aggregate
investment.
(m) Federal Reserve Regulations. FTX will not,
and will cause the Major Subsidiaries not to, use the
proceeds of any Loan in any manner that would result in
a violation of, or be inconsistent with, the provisions
of Regulations G, U or X of the Board (collectively,
the "Margin Regulations"). FTX will not, and will
cause the Major Subsidiaries not to, take any action at
any time that would (A) result in a violation of the
substitution and withdrawal requirements of said
Regulations, in the event the same should become
applicable to this Agreement or any Loan or (B) cause
the representation and warranty contained in Section
4.1(h) at any time to be other than true and
correct. In the event that the Company at any time
believes that there exists a reasonable possibility
that it will become unable to make the representation
set forth in Section 4.1(h)(iv), and alternative
methods for complying with the Margin Regulations in
connection with this Agreement are available, the
Lenders and the Company shall promptly enter into
negotiations with a view to amending this Agreement to
provide for such alternative methods of compliance.
(n) Certain Debt Agreements. FTX shall not,
without the prior written consent thereto of the
Required Banks, (x) agree to any increase in the
principal amount of, or interest rate on, or security
for, any of the Debt referred to in
Section 5.2(g)(i)(A)-(E) or (y) amend, supplement or
change in any material manner (including any earlier
maturity date or amortization schedule), any of the
terms or provisions of any agreement, note or other
instrument governing or evidencing any of the Debt
referred to in Section 5.2(g)(i)(A) and (B).
(o) Investments in the Major Subsidiaries.
Neither FTX nor any of its Restricted Subsidiaries
shall make or permit to exist any loans or advances to,
or purchase any stock, other securities or evidences of
indebtedness of, or permit to exist any investment or
acquire any interest whatsoever in the Major
Subsidiaries or any Subsidiary of either of them, other
than (i) investments existing on the Amendment Closing
Date in shares of common stock or units of such Major
Subsidiary, (ii) Debt permitted by Section 5.2(g)(ii),
(iii) open market purchases of Depositary Units of FRP
to the extent permitted by Section 5.2(q),
(iv) purchases by FTX of equity interests in FRP
sufficient to allow capital expenditures by FRP of up
to $30,000,000 per annum, (v) investments by each Major
Subsidiary and its Subsidiaries in Subsidiaries of such
Major Subsidiary, (vi) investments in FI expressly
contemplated by the Note Purchase Agreement dated as of
July 2, 1991 among FCX and FI, (vii) investments in FI
as a result of the issuance of common stock of FI in
exchange for or discharge of FI's 8.235% Convertible
Subordinated Debentures due 2007, (viii) Guarantees
permitted by Section 5.2(g)(vii) and (ix) the advance
by FCX to FI of the net proceeds of the Debt referred
to in Section 5.2(g)(i)(D).
(p) Investments in FCX. Except for
(i) Guarantees permitted by Section 5.2(g)(vii),
(ii) intercompany loans from FI to FCX and (iii) open
market purchases of the common stock of FCX to the
extent permitted by Section 5.2(q), FTX and the
Restricted Subsidiaries shall not make or permit to
exist any loans or advances to, or purchase any stock,
other securities or evidences of indebtedness of, or
permit to exist any investment (whether by transfer of
assets or otherwise) or acquire any investment
whatsoever in or make any Guarantee with respect to any
such loans, advances, purchases, investments or acquisitions
of interest made by any Person with respect to,
or any other payment for the benefit of, FCX the
aggregate outstanding amount of which at any time
exceeds by more than $60,000,000 the largest aggregate
amount thereof outstanding at any time in the next
preceding fiscal year of FTX.
(q) Equity Payments. FTX shall not make an
Equity Payment if there is then continuing any Default
or Event of Default (or a Default or Event of Default
would result therefrom), other than a failure to be in
compliance with Section 3.2 resulting solely from a
redetermination of the Borrowing Base Factors during a
90-day period as permitted by the last sentence of
Section 2.4 of the FTX Credit Agreement, or if the
Available Borrowing Base would, after giving effect to
such Equity Payment, not remain at or above zero,
without taking into account any redetermination of the
Borrowing Base pursuant to Section 2.3 of the FTX
Credit Agreement; provided, however, that FTX may pay
cash dividends with respect to outstanding shares of
(i) its Convertible Exchangeable Preferred Stock
registered with the SEC by FTX's Registration Statement
on Form S-3 No. 33-12816 and (ii) its $4.375
Convertible Exchangeable Preferred Stock, par value
$1.00 ((i) and (ii) collectively, the "Preferred
Stock") in accordance with the terms of the Preferred
Stock. In addition to the limitations described in the
immediately preceding sentence, if this credit facility
is or would at any time be designated an HLT, FTX shall
not make a proposed Equity Payment if the following
ratio (excluding items relating to Non-Restricted
Subsidiaries for purposes of such calculation) would
not be greater than 1.30 to 1:
Numerator: the sum for the preceding four
fiscal quarters of FTX's (i) Consolidated Cash
Flow, and (ii) any other Net Proceeds from asset
sales not included in clause (i) above.
Denominator: (x) the sum for the preceding
three fiscal quarters of FTX's (i) interest paid
plus capitalized interest on all Debt and
Corporate Group Loans, (ii) Scheduled Principal
Payments, (iii) Equity Payments and Preferred
Stock dividends plus (y) the sum of FTX's (A)
proposed Equity Payment, (B) all previous Equity
Payments and Preferred Stock dividends during the
current fiscal quarter and (C) Scheduled Principal
Payments and projected interest payments on all
Debt and Corporate Group Loans (using the interest
rates applicable at the time of calculation of the
ratio), in each case for the current quarter;
provided, however, that any Corporate Group Loans
prepaid pursuant to Section 3.10(a) or Section
3.10(c) of either this Agreement or the FTX Credit
Agreement or continued or converted pursuant to
Section 3.11 or either this Agreement or FTX
Credit Agreement shall not be included in such
calculation and any other Debt prepaid or
refinanced pursuant to similar provisions of
agreements or instruments governing such other
Debt shall not be included in such calculation if
such Debt would not otherwise have matured within
three months of such prepayment, continuation,
conversion or refinancing.
(r) Covenants Regarding IMC-Agrico. (i) FTX and
the Restricted Subsidiaries shall not make or permit to
exist any loans or advances to, or purchase any stock,
other securities or evidences of indebtedness of, or
permit to exist any investment whatsoever in or make
any Guarantee with respect to any such loans, advances,
purchases, investments or acquisitions of interest made
by any Person with respect to, or any other payment for
the benefit of, IMC-Agrico except (A) the IMC-Agrico
Transfer and (B) in the case of FTX and the Restricted
Subsidiaries, to the extent that the aggregate amount
outstanding of which at any time does not exceed by
more than $50,000,000 the largest aggregate amount
thereof outstanding at any time in the next preceding
fiscal year of FTX.
(ii) FTX shall not permit IMC-Agrico to incur
Debt, other than Debt to FTX or any Restricted
Subsidiary permitted pursuant to paragraph (i) of this
Section 5.2(r), in excess of $225,000,000 at any time
outstanding, and shall not permit Debt of IMC-Agrico at
any time outstanding owing to any Persons (other than
FRP, any Subsidiary of FRP, IMC and any Subsidiary of
IMC) to exceed $110,000,000.
(iii) FTX (A) shall not permit FRP Partner to
agree, without the prior written consent of the
Required Banks, (x) to amend Section 6.04(a), (b) or
(d) or Section 6.07 of the IMC-Agrico Partnership
Agreement or any defined term included in either such
Section or (y) to enter into any agreement which
conflicts with either Section which would in the case
of either (x) or (y) dilute the control of FRP Partner
or narrow the scope of the decisions subject to vote by
FRP Partner, (B) shall notify the Agent of any proposed
amendment to any of the IMC-Agrico Contribution
Agreement, the IMC-Agrico Partnership Agreement or the
IMC-Agrico Parent Agreement and (C) shall not, and
shall not permit any of its Subsidiaries to, in each
case without the prior written consent of the Required
Banks, agree to amend any such agreement if, in the
opinion of the Agent, such amendment would reasonably
be expected to adversely affect the interests of the
Banks.
(iv) Neither FTX nor FRP shall permit its
accounting of IMC-Agrico to be other than as a
proportional consolidating interest unless FTX, FRP and
the Agent have agreed upon mutually acceptable
amendments to the financial covenants herein.
(s) Covenants Regarding ALatief-FI. (i) FTX and
FI shall not permit ALatief-FI to incur the initial
transfer and the initial financing referred to in
Section 7.2 of the ALatief-FI Joint Venture Agreement
without the prior written consent of the Agent, such
consent not to be unreasonably withheld, and, if FI
shall not have Guaranteed such financing, without the
prior written consent of the Required Borrowing Base
Banks, each such consent to be conditioned upon the
satisfactory factoring of such financing into the
calculation of Borrowing Base Debt.
(ii) FI shall notify the Agent of any proposed
amendments to the ALatief-FI Joint Venture Agreement
and, without the prior written consent of the Required
Banks, FI shall not agree to amend the ALatief-FI Joint
Venture Agreement if, in the opinion of the Agent, such
amendment could adversely affect the interests of the
Banks.
SECTION 5.3. Additional Covenants of FI and FCX.
So long as any Bank shall have any Loan Exposure or any
commitment to make a Loan hereunder, FI and FCX each
directly agrees with the Banks and the Agent that, without
the prior written consent of the Required Banks, it will
not, and will cause each of its own Subsidiaries not to,
fail to comply with the provisions of Sections 5.1 and 5.2
which are applicable to it and FI will not materially alter
the nature and scope of the business and activities in which
it is engaged as of the Amendment Closing Date.
ARTICLE VI
Conditions of Credit
SECTION 6.1. Conditions Precedent to Each Credit
Event. Each Credit Event shall be subject to the following
conditions precedent:
(i) the representations and warranties on the part
of FI and the Guarantors and of FRP contained in the
Loan Documents shall be true and correct in all material
respects at and as of the date of such Credit
Event as though made on and as of such date;
(ii) the Agent shall have received a notice of such
borrowing as required by Section 3.4;
(iii) no Event of Default shall have occurred and be
continuing on the date of such Credit Event or would
result from such Credit Event;
(iv) there shall have been no amendments to the
Certificate of Incorporation, the Certificate of
Domestication or the Certificate of Limited
Partnership, as applicable, or the By-laws or
Partnership Agreement, as applicable, of any Guarantor
or Major Subsidiary since the date of the Certificate
furnished by FTX pursuant to Section 6(a) of the
Amendment Agreement, other than amendments, if any,
copies of which have been furnished to the Agent; and
(v) except as permitted by the proviso to
Section 5.2(c), there shall be no proceeding for the
dissolution or liquidation of any Guarantor or Major
Subsidiary or any proceeding to revoke the Certificate
of Incorporation of FTX, FCX or FI or to rescind the
partnership agreement of FRP or the corporate or
partnership existence, which is pending or, to the
knowledge of FTX, threatened against or affecting any
Guarantor or Major Subsidiary.
SECTION 6.2. Representations and Warranties with
Respect to Credit Events. Each Credit Event shall be deemed
a representation and warranty by FTX and FI that the
conditions precedent to such Credit Event, unless otherwise
waived in accordance herewith, shall have been satisfied.
ARTICLE VII
Events of Default
SECTION 7.1. Events of Default. If any of the
following acts or occurrences (an "Event of Default") shall
occur and be continuing:
(a) default for three or more days in the payment
when due of any principal of any Corporate Group Note;
or
(b) default for five or more days in the payment
when due of any interest on any Corporate Group Note,
or of any other amount payable under the Corporate
Group Facility; or
(c) any representation or warranty made or deemed
made in or in connection with any Loan Document or in
any certificate, letter or other writing or instrument
furnished or delivered to the Agent, the FTX Agent, the
FI Trustee, any Bank or any FTX Lender pursuant hereto
or to the FTX Credit Agreement shall prove to have been
incorrect in any material respect when made or
effective or reaffirmed and repeated, as the case may
be; or
(d) default by FTX, either Major Subsidiary or FCX
in the due observance or performance of any covenant,
condition or agreement in Section 5.1(c) or 5.1(h) of
either this Agreement or the FTX Credit Agreement,
other than the covenant to preserve and maintain all of
such Person's rights, privileges and franchises
desirable in the normal conduct of it business; or
(e) default by FTX, either Major Subsidiary or FCX
in the due observance or performance of any covenant,
condition or agreement in Section 5.2 of this Agreement
or in Section 5.2 of the FTX Credit Agreement (other
than, in each case, paragraph (k)); or
(f) default by FTX, either Major Subsidiary or FCX
in the due observance or performance of any other
covenant, condition or agreement in the Corporate Group
Facility which shall remain unremedied for 30 days
after written notice thereof shall have been given to
such Person by any Bank; or
(g) FTX or any Restricted Subsidiary shall
(i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended,
or any other Federal or state bankruptcy, insolvency,
liquidation or similar law or, in the case of FI, any
such law of Indonesia, (ii) consent to the institution
of, or fail to contravene in a timely and appropriate
manner, any proceeding or the filing of any petition
described in clause (h) below, (iii) apply for or
consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for FTX or
such Restricted Subsidiary or for a substantial part of
its property or assets, (iv) file an answer admitting
the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, admit
in writing its inability or fail generally to pay its
debt as they become due or (vii) take any action for
the purpose of effecting any of the foregoing; or
(h) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of
competent jurisdiction seeking (i) relief in respect of
FTX or any Restricted Subsidiary, or of a substantial
part of the property or assets of FTX or any Restricted
Subsidiary, under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other
Federal or state bankruptcy, insolvency, receivership
or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official
for FTX or any Restricted Subsidiary or for a
substantial part of the property of FTX or any
Restricted Subsidiary or (iii) the winding-up or
liquidation of FTX or any Restricted Subsidiary; and
such proceeding or petition shall continue undismissed
for 60 days, or an order or decree approving or
ordering any of the foregoing shall continue unstayed
and in effect for 30 days; or
(i) default shall be made with respect to any Debt
of FTX or any Restricted Subsidiary if the effect of
any such default shall be to accelerate, or to permit
the holder or obligee of any Debt (or any trustee on
behalf of such holder or obligee) to accelerate (with
or without notice or lapse of time or both), the
maturity of Debt in an aggregate amount in excess of
$10,000,000; or any payment of principal or interest,
regardless of amount, on any Debt of FTX or a
Restricted Subsidiary in an aggregate principal amount
in excess of $10,000,000, shall not be paid when due,
whether at maturity, by acceleration or otherwise
(after giving effect to any period of grace specified
in the instrument evidencing or governing such Debt);
or
(j) a Reportable Event or Reportable Events, or a
failure to make a required payment (within the meaning
of Section 412(n)(1)(A) of the Code) shall have
occurred with respect to any Plan or Plans that reasonably
could be expected to result in liability of FTX to
the PBGC or to a Plan in an aggregate amount exceeding
$10,000,000 and, within 30 days after the reporting of
any such Reportable Event to the Agent or after the
receipt by the Agent of the statement required pursuant
to clause (iii) of Section 5.1(f), the Agent shall have
notified FI in writing that (i) the Required Banks have
made a determination that, on the basis of such Reportable
Event or Reportable Events or the receipt of such
statement, there are reasonable grounds (A) for the
termination of such Plan or Plans by the PBGC, (B) for
the appointment by the appropriate United States
District Court of a trustee to administer such Plan or
Plans or (C) for the imposition of a lien in favor of a
Plan and (ii) as a result thereof an Event of Default
exists hereunder; or a trustee shall be appointed by a
United States District Court to administer any such
Plan or Plans; or the PBGC shall institute proceedings
to terminate any Plan or Plans; or
(k) FTX or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multiemployer
Plan, (ii) FTX or such ERISA Affiliate does not have
reasonable grounds for contesting such Withdrawal
Liability and is not in fact contesting such Withdrawal
Liability in a timely and appropriate manner, and
(iii) the amount of such Withdrawal Liability specified
in such notice, when aggregated with all other amounts
required to be paid to Multiemployer Plans in
connection with Withdrawal Liabilities (determined as
of the date or dates of such notification), exceeds
$10,000,000 or requires payments exceeding $10,000,000
in any year; or
(l) FTX or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of
ERISA, if solely as a result of such reorganization or
termination the aggregate annual contributions of FTX and
its ERISA Affiliates to all Multiemployer Plans that are
then in reorganization or have been or are being terminated
have been or will be increased over the amounts required to
be contributed to such Multiemployer Plans for their most
recently completed plan years by an amount exceeding
$10,000,000;
(m) a final judgment for the payment of money in excess
of $10,000,000 shall be rendered by a court or other
tribunal against FTX or any Restricted Subsidiary and shall
remain undischarged for a period of 45 consecutive days
during which execution of such judgment shall not have been
stayed effectively; or any action shall be legally taken by
a judgment creditor to levy upon assets or properties of FTX
or any Restricted Subsidiary to enforce any such judgment;
(n) the security interest in the Contract of Work
granted in the FI Trust Agreement shall be deemed to be
invalid or fail to be in full force and effect or the
Contract of Work shall be terminated or otherwise fail to be
in full force and effect or shall be amended without the
consent of the Required Banks in any manner which materially
and adversely affects the rights and benefits granted to the
FI Trustee and the Banks under the FI Security Documents; or
the Ministry of Mines and Energy of Indonesia (or any
successor entity) or the Government of Indonesia shall have
taken any action in contravention of the Contract of Work
which materially adversely affects FI's ability to perform
its obligations under the Corporate Group Facility or the
rights and benefits granted to the FI Trustee under any FI
Security Document; or
(o) any Governmental Authority shall condemn, seize,
nationalize, assume the management of or appropriate any
material portion of FI's property, assets or revenues
(either with or without payment of compensation);
then, and in any such event (other than an event with
respect to FTX or either Major Subsidiary described in
paragraph (g) or (h) above), and at any time thereafter
during the continuance of such event, the Agent may,
and at the request of the Required Banks shall, by written
or telegraphic notice to FTX, take one or more of the
following actions at the same or different times:
(i) declare the Total Commitment to be terminated,
whereupon the Total Commitment shall
forthwith terminate; (ii) declare all sums then owing by FI under the
Promissory Notes or otherwise owing hereunder to be forthwith due and
payable, whereupon all such sums shall become and be immediately due
and payable without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived by FI, anything
contained herein or in any Promissory Note to the contrary
notwithstanding standing or (iii) exercise any or all the remedies
then available under the FI Security Documents, the Pledge Agreement
or the Security Agreements; provided, however, that upon the
occurrence of any event described in paragraph (g) or (h) of this
Section 7.1 as to which FTX or either Major Subsidiary is the entity
involved, all sums then owing by FI to the Banks upon the Promissory
Notes or otherwise hereunder shall, without any declaration or other
action by any Bank hereunder, be immediately due and payable and the
Total Commitment hereunder shall be immediately terminated subject to
the final sentence of this Section 7.1 without presentment, demand,
protest or notice of any kind, all of which are expressly waived by
FI, anything contained herein or in any Promissory Note to the
contrary notwithstanding. Promptly following the making of any such
declaration, the Agent shall give notice thereof to FI but failure to
do so shall not impair the effect of such declaration.
ARTICLE VIII
The Agent and the FI Trustee
SECTION 8.1. The Agent and the FI Trustee.
(a) For convenience of administration and to expedite the
transactions contemplated by this Agreement, Chemical Bank
is hereby appointed as Agent and Collateral Agent for the
Banks under this Agreement and Morgan Guaranty Trust Company
of New York as trustee under the FI Trust Agreement is
hereby appointed as FI Trustee for the Banks under the FI
Security Documents. Each Bank (i) confirms and agrees to be
bound by the terms of the FI Trust Agreement and (ii) agrees
that the FI Trustee in accepting appointment and in acting
as security agent under the FI Security Documents shall be
entitled to all the rights, immunities, privileges,
protections, exculpations, indemnifications, liens and other
benefits applicable to its acting as trustee under the FI
Trust Agreement. Neither the Agent nor the Collateral Agent
shall have any duties or responsibilities with respect
hereto except those expressly set forth herein. Each Bank
hereby irrevocably appoints and expressly authorizes the
Agent and the Collateral Agent, without hereby limiting any
implied authority, to take such action as the Agent or the
Collateral Agent, as applicable, on its behalf and to exercise
such powers under this Agreement as are delegated to
such Person by the terms hereof, together with such powers
as are reasonably incidental thereto. Each of the Agent and
the Collateral Agent may exercise any of its duties hereunder
by or through their respective agents, officers or
employees. In addition, each Bank hereby irrevocably
(i) authorizes and directs the Collateral Agent to enter, on
behalf of each of them, into the FTX Intercreditor Agreement
and, as contemplated pursuant to this Agreement, the Pledge
Agreement and the Security Agreement and (ii) authorizes and
directs the FI Trustee to enter, on behalf of each of them,
into the FI Security Documents, and in each case agrees to
be bound by the terms thereof.
(b) Neither the Agent, the Collateral Agent nor
any of their respective directors, officers, agents or
employees shall be liable to any Bank, FI or either
Guarantor for any action taken or omitted to be taken by it
or them in good faith under or in connection with this
Agreement and shall neither be responsible to any Bank, FI
or either Guarantor for the consequences of any oversight or
error of judgment nor be answerable to any Bank, FI or
either Guarantor for any loss unless the same shall happen
through its or their gross negligence or wilful misconduct.
The Agent may treat the payee of any Promissory Note as the
holder thereof until written notice of transfer shall have
been filed with it signed by such payee and in form
satisfactory to the Agent. The Agent and the Collateral
Agent may each consult with legal counsel selected by it and
shall be entitled to rely upon the advice of such counsel as
to its duties and shall not be liable for any action taken
or suffered in good faith by it in accordance with the
advice of such counsel. Neither the Agent nor the Collateral
Agent shall be under a duty to enter into or pass
upon the validity, effectiveness, genuineness or value of
this Agreement, any Promissory Note or any other Loan Document,
any other instrument or document delivered pursuant
hereto or thereto or herewith or therewith, or any representation,
warranty or agreement made herein or therein or
in connection herewith or therewith, and the Agent and the
Collateral Agent each shall be entitled to assume that the
same are valid, effective and genuine in what they purport
to be. Neither the Agent nor the Collateral Agent shall
incur any liability under or in respect of this Agreement by
acting upon any notice, consent, certificate, warranty or
other paper or instrument believed by such Person to be
genuine or authentic or to be signed by the proper party, or
with respect to anything which it may do or refrain from
doing in the reasonable exercise of its judgment, or which
may seem to it to be necessary or desirable on such
premises.
(c) To the extent that either the Agent or the
Collateral Agent shall not be reimbursed by FI or either
Guarantor for any costs, liabilities or expenses incurred in
such capacity or, to the extent the FI Trustee shall not be
reimbursed by the Borrowers for any costs, liabilities or
expenses incurred in its capacity as trustee under the FI
Trust Agreement (including in its capacity as security agent
under the FI Security Documents), each Bank agrees to
indemnify such Person, pro rata in accordance with its
Applicable Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on or
incurred by or asserted against such Person in any way
relating to or arising out of this Agreement or the FI Trust
Agreement, as the case may be; provided, however, that no
Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
Agent's, the Collateral Agent's or the FI Trustee's gross
negligence or wilful misconduct. Each Bank agrees promptly
to pay to the Agent, the Collateral Agent or the FI Trustee,
as applicable, its pro rata portion of the statement of
amounts payable by FI to such Person under this Agreement
which are not paid by FI for any reason, within 30 days of
the date such statement is sent to the Banks by such Person.
(d) It is expressly understood and agreed that
the obligations of the Agent and the Collateral Agent are
only those expressly set forth with respect to it in this
Agreement. The Agent shall not be required to take any
action and shall have no obligations, except such actions
and obligations which it is expressly required to take or
observe by the terms of this Agreement. Each Bank agrees
that the Agent shall be entitled to take any action which it
is permitted to take hereunder, but shall only be required
to take any such action at the written request of the
Required Banks. The Agent and the Collateral Agent shall be
entitled to assume that no Event of Default or Default has
occurred and is continuing, unless such Person has actual
knowledge of such fact or has received notice from a Bank
that such Bank considers that an Event of Default or Default
has occurred and is continuing and specifying the nature
thereof. In the event that the Agent or the Collateral
Agent shall have acquired actual knowledge of any such Event
of Default or Default, such Person shall promptly give
notice thereof to the Banks, and will take such action and
assert such rights pursuant to this Agreement as the
Required Banks shall direct. The Agent and the Collateral
Agent shall in all cases be fully protected for any action
taken pursuant to such directions.
(e) The Agent and the Collateral Agent may resign
at any time by giving written notice thereof to the Banks
and FI and may be removed at any time with or without cause
by the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint,
and FI shall have the right to approve (such approval not to
be unreasonably withheld or delayed) a successor Agent or
Collateral Agent, as the case may be. If no successor Agent
or Collateral Agent, as the case may be, shall have been so
appointed and approved and shall have accepted such
appointment, within 30 days after the retiring Person's
giving of notice of resignation or the Banks' removal of the
retiring Person, then the retiring Person may, on behalf of
the Banks, appoint a successor Agent or Collateral Agent, as
the case may be, which shall be a Bank. Upon the acceptance
of any appointment as Agent or Collateral Agent hereunder by
a successor Agent or Collateral Agent, as the case may be,
such successor Agent or Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Person, and the
retiring Person shall be discharged from its duties and
obligations hereunder. After any such retiring Person's
resignation or removal hereunder as Agent or Collateral
Agent, as applicable, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Agent or
Collateral Agent, as applicable, under this Agreement.
(f) The Agent shall be responsible for
supervising the preparation, execution and delivery of this
Agreement and the other agreements and instruments
contemplated hereby, any amendment or modification thereto
and the closing of the transactions contemplated hereby and
thereby. In addition, the Agent shall assist each of the
Collateral Agent and the FI Trustee in the performance of
its duties as may be reasonably requested by such Person
from time to time.
(g) The obligations of the Agent, the Collateral
Agent and the FI Trustee shall be separate and several and
neither of them shall be responsible or liable for the acts
or omissions of the other, except to the extent that a Bank
serves in more than one agent and/or trustee capacity, such
Bank shall be responsible for the acts and omissions
relating to each such agency and/or trust function.
(h) Without the prior written consent of the
Required Banks, the Collateral Agent will not consent to any
modification, supplement or waiver of the FTX Intercreditor
Agreement.
(i) Notwithstanding any other provision of this
Section 8.1, the Agent will, at the request of FI, instruct
the FI Trustee to release from the FI Trust Agreement and
the other FI Security Documents (and enter into an amendment
to the FI Trust Agreement and the other FI Security
Documents and execute such other instruments as may be
necessary in connection therewith) any interest of the FI
Trustee in (i) the rights of FI under the Contract of Work
in respect of all or any part of Contract Area Block B (as
defined in the Contract of Work), without further consent by
the Required Banks and the Required Banks (as defined in the
FTX Credit Agreement) if, in the opinion or opinions of
counsel acceptable to the Agent and in the opinion of the
Agent, such release is to be effected without impairing or
adversely affecting (A) the Lien and interest of the FI
Trustee stated to be created in the rights of FI under the
Contract of Work in respect of Contract Area Block A (as
defined in the Contract of Work) and the FI Project (to the
extent it includes the mining, concentrating,
transportation, shipping and related operations of FI in
respect of FI Product obtained or produced from Contract
Area Block A) by the FI Trust Agreement and the other FI
Security Documents, the Memorandum of Understanding and the
Contract of Work or (B) the rights of FI relating to
ownership and operation of the FI Project (to the extent it
includes the mining, concentration, transportation, shipping
and related operations of FI in respect of FI Product
obtained or produced from Contract Area Block A), (ii) the
property and rights to be transferred pursuant to the
ALatief-FI Transfer and (iii) the property and rights to be
transferred pursuant to the Power Facilities Transfer.
ARTICLE IX
Guarantees
SECTION 9.1. Guarantee. As consideration for the
Banks' obligations to lend hereunder, each Guarantor hereby
unconditionally and irrevocably guarantees, as a primary
obligor and not merely as a surety, the due and punctual
payment of (x) the principal of and interest on each
Promissory Note of FI, when and as due, whether at maturity,
by acceleration, by notice of prepayment or otherwise,
(y) all other monetary obligations of FI to the Banks, the
Agent and the FI Trustee under this Agreement and (z) all
amounts owing by FI to any Bank pursuant to any Permitted
Secured Swap (collectively, the "FI Obligations"). Each
Guarantor further agrees that the FI Obligations may be
extended or renewed, in whole or in part, without notice or
further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of
any such FI Obligation.
Each Guarantor waives presentment to, demand of
payment from and protest to FI of any of the FI Obligations,
and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment. The obligations of each
Guarantor under this Section 9.1 shall not be affected by
(a) the failure of any Bank, the Agent or the FI Trustee to
assert any claim or demand or to enforce any right or remedy
against FI under the provisions of this Agreement or
otherwise; (b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this
Agreement, any Promissory Note any guarantee or any other
agreement; (c) the release of any security held by any Bank,
the Agent or the FI Trustee for the Obligations guaranteed
by it or any of them; or (d) the failure of any Bank, the
Agent or the FI Trustee to exercise any right or remedy
against any other guarantor of the FI Obligations.
Each Guarantor further agrees that its guarantee
constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort
be had by any Bank, the Agent or the FI Trustee to any
security held for payment of the FI Obligations or to any
balance of any deposit account or credit on the books of
such Bank in favor of FI or any other Person.
The obligations of each Guarantor under this
Section 9.1 shall not be subject to any reduction,
limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be
subject to any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the FI Obligations or
otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor under this
Section 9.1 shall not be discharged or impaired or otherwise
affected by the failure of any Bank, the Agent or the FI
Trustee to assert any claim or demand or to enforce any
remedy under this Agreement, any Promissory Note, any
guarantee or any other agreement, by any waiver or
modification of any thereof, by any default, failure or
delay, wilful or otherwise, in the performance of the FI
Obligations, or by any other act or omission which may or
might in any manner or to any extent vary the risk of either
Guarantor, or otherwise operate as a discharge of FTX or FCX
as a matter of law or equity.
Each Guarantor further agrees that its guarantee
shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of
principal of or interest on any Obligation guaranteed by it
(including, without limitation, any payment pursuant to this
guarantee) is rescinded or must otherwise be restored by any
Bank, the Agent or the FI Trustee upon the bankruptcy or
reorganization of FI or otherwise.
In furtherance of the foregoing and not in limitation
of any other right which any Bank, the Agent or the FI
Trustee may have at law or in equity against either
Guarantor by virtue hereof, upon the failure of FI to pay
any of the FI Obligations when and as the same shall become
due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to
and will, upon receipt of written demand by any Bank, the
Agent or the FI Trustee, forthwith pay, or cause to be paid,
to the Agent for distribution to the Banks, the Agent or the
FI Trustee, as appropriate, in cash the amount of such
unpaid FI Obligations, and at such time as all such FI
Obligations owing to such Bank, the Agent, or the FI Trustee
as applicable, have been indefeasibly paid in full and its
Commitment terminated, such Bank shall, in a reasonable
manner, assign the amount of such FI Obligations owed to it
and paid by such Guarantor pursuant to this guarantee to
such Guarantor, such assignment to be pro tanto to the
extent to which the FI Obligations in question were
discharged by such Guarantor or make such other disposition
thereof as such Guarantor shall direct (all without recourse
to such Bank, the Agent or the FI Trustee, as applicable and
without any representation or warranty by such Bank, the
Agent or the FI Trustee, as applicable.
Upon payment by either Guarantor of any sums to a
Bank, the Agent or the FI Trustee as provided above in this
Section 9.1, all rights of such Guarantor against FI or the
other Guarantor arising as a result thereof by way of right
of subrogation or otherwise shall in all respects be subordinated
and junior in right of payment to the prior indefeasible
payment in full of all the FI Obligations to the
Banks, the Agent and the FI Trustee and all the FI Obligations
(as defined in the FTX Credit Agreement) and shall not
be exercised by such Guarantor prior to indefeasible payment
in full of all Corporate Group Loans and termination of the
Commitments and the commitments under the FTX Credit Agreement.
ARTICLE X
Miscellaneous
SECTION 10.1. Notices. Notices and other communications
provided for herein shall be in writing and
shall be delivered by hand or overnight or same day courier
service or mailed or sent by telex, telecopy, graphic
scanning or other telegraphic communications equipment of
the sending party to the appropriate party's address set
forth on the signature pages hereof. All notices and other
communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have
been given on the date of receipt if hand delivered or three
days after being sent by registered or certified mail,
postage prepaid, return receipt requested, if by mail, or
upon receipt if by any telecopy, telegraphic or telex
communications equipment, in each case addressed to such
party as provided in this Section 10.1 or in accordance with
the latest unrevoked direction from such party. Any notice
delivered to FTX hereunder shall be deemed also to have been
given to FI, and such notice shall be deemed to have been
given to FI on the day it is deemed to have been given to
FTX.
SECTION 10.2. Survival of Agreement. All covenants,
agreements, representations and warranties made by FI
or the Guarantors herein and in the certificates or other
instruments prepared or delivered in connection with this
Agreement shall be considered to have been relied upon by
the Banks, the Agent and the FI Trustee and shall survive
the making by the Banks of the Loans and the execution and
delivery to the Banks of the Promissory Notes evidencing
such Loans regardless of any investigation made by the Banks
or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest
on any Corporate Group Note, any Commitment Fee or any other
fee or amount payable under the Corporate Group Notes or the
Corporate Group Facility is outstanding and unpaid and so
long as the Commitments or the commitments under the FTX
Credit Agreement have not been terminated.
SECTION 10.3. Successors and Assigns; Participations;
Purchasing Banks. (a) This Agreement shall be
binding upon and inure to the benefit of FI, the Guarantors,
the Banks, the Agent, the FI Trustee (for purposes of
Article VIII only), all future holders of the Promissory
Notes, and its respective successors and assigns, except
that neither FTX, FI, nor FCX may assign or transfer any of
its rights or obligations under this Agreement without the
prior written consent of each Bank. Any Bank may at any
time pledge or assign all or any portion of its rights under
this Agreement and the Promissory Notes issued to it to a
Federal Reserve Bank; provided that no such pledge or
assignment shall release a Bank from any of its obligations
hereunder.
(b) Any Bank may, in the ordinary course of its
business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Bank, any
Promissory Note held by such Bank, any Commitment of such
Bank or any other interest of such Bank hereunder. In the
event of any such sale by a Bank of participating interests
to a Participant, such Bank's obligations under this Agreement
to the other parties to this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of
any such Promissory Note for all purposes under this Agreement
and FI and the Guarantors and the Agent shall continue
to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement.
FI and the Guarantors agree that if amounts outstanding
under this Agreement and the Promissory Notes are due
and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing
under this Agreement and any Promissory Note to the same
extent as if the amount of its participating interest were
owing directly to it as a Bank under this Agreement or any
Promissory Note; provided that such right of setoff shall be
subject to the obligation of such Participant to share with
the Banks, and the Banks agree to share with such Participant,
as provided in Section 3.16. FI and the Guarantors
also agree that each Participant shall be entitled to the
benefits of Sections 3.12, 3.13, 3.14, 3.16, 3.18, 3.19 and
10.5 with respect to its participation in the Commitments
and the Loans outstanding from time to time; provided that
no Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Bank
would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Bank to
such Participant had no such transfer occurred and provided
further that the voting rights of any Participant would be
limited to changes in amounts of Loan or Commitment, rates,
fees and maturity affecting such Participant and release of
all or substantially all the collateral for the FI
Obligations. Each Bank selling a participation with a tenor
longer than 183 days will use its best efforts to inform FTX
of (i) the amount of any such participations sold and
(ii) the identity of all Participants purchasing such
participations.
(c) [Intentionally left blank.]
(d) This Agreement shall not be assignable by the
Banks, except that a Bank may, in accordance with applicable
law, and subject to Section 10.3(j), at any time assign by
novation all or any part of its rights and obligations under
this Agreement and its Promissory Notes (I) to any Bank or
any affiliate thereof, without FI's consent, or (II) to one
or more additional banks or financial institutions (any such
entity referred to in clause (I) or (II) being a "Purchasing
Bank") with FI's consent, such consent not to be
unreasonably withheld (except that any Bank may assign its
rights and obligations under this Agreement and any
affiliate thereof and its Promissory Notes to any other Bank
that is a party to this Agreement without the necessity of
approval by FI or any Guarantor), pursuant to a Commitment
Transfer Supplement in the form of Exhibit D hereto,
executed by such Purchasing Bank, such transferor Bank (and,
in the case of a Purchasing Bank that is not then a Bank or
an affiliate thereof, by FI and the Agent), and delivered to
the Agent for its recording in the Register. Assignments
shall be by novation only. Upon such execution, delivery
and recording (and, if required, consent of FI), from and
after the Transfer Effective Date determined pursuant to
such Commitment Transfer Supplement, (x) the Purchasing Bank
thereunder shall (if not already a party hereto) be a party
hereto and, to the extent provided in such Commitment
Transfer Supplement, have the rights and obligations of a
Bank hereunder with a Commitment as set forth therein, and
(y) the transferor Bank thereunder shall, to the extent
provided in such Commitment Transfer Supplement, be released
from its obligations under this Agreement (and, in the case
of a Commitment Transfer Supplement covering all or the
remaining portion of a transferor Bank's rights and obligations
under this Agreement, such transferor Bank shall cease
to be a party hereto). Such Commitment Transfer Supplement
shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of
such Purchasing Bank (if not already a party hereto) and the
resulting adjustment of Applicable Percentages arising from
the purchase by such Purchasing Bank of all or a portion of
the rights and obligations of such transferor Bank under
this Agreement and the Promissory Notes. On or prior to the
Transfer Effective Date determined pursuant to such Commitment
Transfer Supplement, FI, at its own expense, shall
execute and deliver to the Agent in exchange for the
surrendered Promissory Note a new Promissory Note to the
order of such Purchasing Bank in an amount equal to the
Commitment assumed by it pursuant to such Commitment
Transfer Supplement and, if the transferor Bank has retained
a Commitment hereunder, a new Promissory Note to the order
of the transferor Bank in an amount equal to the Commitment
retained by it hereunder. Such new Promissory Notes shall
be dated the Original Execution Date and shall otherwise be
in the form of the Promissory Notes replaced thereby. The
Promissory Note surrendered by the transferor Bank shall be
returned by the Agent to FI marked "canceled".
(e) The Agent shall maintain at its address
referred to in Section 10.1 a copy of each Commitment
Transfer Supplement delivered to it and a register (the
"Register") for the recordation of the names and addresses
of the Banks, and the Commitment of, and principal amount of
the Loans owing to, each Bank from time to time. The
entries in the Register shall be conclusive, in the absence
of manifest error, and the parties hereto may treat each
Person whose name is recorded in the Register as the owner
of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection
by the parties hereto at any reasonable time and from time
to time upon reasonable prior notice.
(f) Upon its receipt of a Commitment Transfer
Supplement executed by a transferor Bank and a Purchasing
Bank (and, in the case of a Purchasing Bank that is not then
a Bank or an affiliate thereof, by FI and the Agent)
together with payment to the Agent of a registration and
processing fee of $2,000, the Agent shall (i) promptly
accept such Commitment Transfer Supplement and (ii) on the
Transfer Effective Date determined pursuant thereto record
the information contained therein in the Register and give
notice of such acceptance and recordation to the Banks and
FI.
(g) Subject to Section 10.16, FI authorizes each
Bank to disclose to any Participant or Purchasing Bank
(each, a "Transferee") and any prospective Transferee any
and all financial information in such Bank's possession
concerning FTX and its affiliates which has been delivered
to such Bank by or on behalf of FTX or FI pursuant to this
Agreement or which has been delivered to such Bank by or on
behalf of FTX or FI in connection with such Bank's credit
evaluation of FTX and its affiliates prior to becoming a
party to this Agreement.
(h) If, pursuant to this Section 10.3, any
interest in this Agreement or any Promissory Note is transferred
to any Transferee other than a Participant which is
organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Bank
(x) shall immediately notify the Agent of such transfer,
describing the terms thereof and indicating the identity and
country of residence of each Transferee and (y) shall cause
such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Bank (for the
benefit of the transferor Bank, the Agent and FI) that under
applicable law and treaties no taxes will be required to be
withheld by the Agent, FI or the transferor Bank with
respect to any payments to be made to such Transferee in
respect of the Loans, (ii) to furnish to the transferor Bank
(and, in the case of any Purchasing Bank registered in the
Register, the Agent and FI) either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001
(wherein such Transferee claims entitlement to complete
exemption from U.S. Federal withholding tax on all interest
payments hereunder) and (iii) to agree (for the benefit of
the transferor Bank, the Agent and FI) to provide the
transferor Bank (and, in the case of any Purchasing Bank
registered in the Register, the Agent and FI) a new
Form 4224 or Form 1001 upon the expiration or obsolescence
of any previously delivered form and comparable statements
in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee,
and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax
exemption. Notwithstanding any other provision contained
herein to the contrary, FI and the Agent shall be entitled
to deduct and withhold United States withholding taxes with
respect to all payments to be made hereunder to or for such
transferor Bank or Transferee as may be required by United
States law due to such assignments and such transferor Bank
or Transferee shall indemnify and hold harmless FI and the
Agent from and against any tax, interest, penalty or other
expense that FI and the Agent may incur as a consequence of
any failure to withhold United States taxes applicable
because of any transfer or participation arrangement that is
not fully disclosed to them as required hereunder.
(i) If, pursuant to this Section 10.3, a Bank
sells participating interests to a Participant which is
organized under the laws of any jurisdiction other than the
United States or any State thereof, the selling Bank shall
cause such Participant, concurrently with the effectiveness
of such sale, (i) to represent to the selling Bank (for the
benefit of the selling Bank, the Agent and FI) that under
applicable law and treaties no taxes will be required to be
withheld by the Agent, FI or the selling Bank with respect
to any payments to be made to such Participant in respect of
the Loans, (ii) to furnish to the selling Bank either U.S.
Internal Revenue Service Form 4224 or U.S. Internal Revenue
Service Form 1001 (wherein such Participant claims
entitlement to complete exemption from U.S. Federal
withholding tax on all interest payments hereunder) and
(iii) to agree (for the benefit of the selling Bank, the
Agent and FI) to provide the selling Bank a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any
previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Participant,
and to comply from time to time with all applicable U.S.
laws and regulations with regard to such withholding tax
exemption. Notwithstanding any other provision contained
herein to the contrary, FI and the Agent shall be entitled
to deduct and withhold United States withholding taxes with
respect to all payments to be made hereunder to or for such
selling Bank or Participant as may be required by United
States law due to such participations and such selling Bank
or Participant shall indemnify and hold harmless FI and the
Agent from and against any tax, interest, penalty or other
expense that FI and the Agent may owe as a consequence of
any selling Bank's failure to obtain tax forms securing
complete exemption from U.S. withholding taxes.
(j) Notwithstanding anything in this Section 10.3
to the contrary, (i) without the prior written consent of
the Agent and FTX, no Bank which is an FM Lender shall
(except as permitted by paragraph (a) of this Section 10.3
regarding assignments to Federal Reserve Banks) assign any
interest in or Commitment under this Agreement or any Loans
unless at the same time it shall also assign, to the same
assignee, the same proportion of its interest in and
commitment and loans outstanding under the FM Credit
Agreement pursuant to the provisions governing assignments
set forth therein and (ii) no Bank which is an FTX Lender
shall (except as permitted by paragraph (a) of this
Section 10.3 regarding assignments to Federal Reserve Banks)
make any such assignment of its interests hereunder unless
it shall also assign, to the same assignee, the same
proportion of its interest in and commitment and loans
outstanding under the FTX Credit Agreement.
SECTION 10.4. Expenses of the Banks;
Indemnity. (a) The Guarantors and FI agree, jointly and
severally, to pay all out-of-pocket expenses reasonably
incurred by the Agent in connection with the preparation of
this Agreement and the Promissory Notes or with any
amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions hereby
contemplated shall be consummated) or reasonably incurred by
the Agent or any Bank in connection with the enforcement or
protection of their rights in connection with this Agreement
or with the Loans made or the Promissory Notes issued
hereunder (whether through negotiations, legal proceedings
or otherwise), including, but not limited to, the reasonable
fees and disbursements of Cravath, Swaine & Moore, special
counsel for the Agent and, in connection with such
enforcement or protection, the reasonable fees and
disbursements of other counsel for any Bank. Each of the
Guarantors and FI further agree, jointly and severally, that
it shall indemnify the Banks, the Agent, the Collateral
Agent and the FI Trustee from and hold them harmless against
any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and
delivery of or in connection with the performance of this
Agreement, any of the Promissory Notes or any of the other
Loan Documents. Further, each of the Guarantors and FI
agrees to pay, and to protect, indemnify and save harmless
each Bank, the Agent, the Collateral Agent and the FI
Trustee and each of their respective officers, directors,
shareholders, employees, agents and servants from and
against, any and all losses, liabilities (including liabilities
for penalties), actions, suits, judgments, demands,
damages, costs or expenses (including, without limitation,
attorneys' fees and expenses in connection with any investigative,
administrative or judicial proceeding, whether or
not such Bank or the Agent shall be designated a party
thereto) of any nature arising from or relating to the
issuance or delivery of Promissory Notes or in connection
with the enforcement of this Agreement or the other Loan
Documents or relating to the use of proceeds of Loans
hereunder for the purpose of acquiring equity securities of
any other Person; provided, however, that FI and the
Guarantors shall have no obligation to protect, indemnify
and save harmless any Bank, the Agent, the Collateral Agent
or the FI Trustee or any other Person otherwise entitled to
indemnity hereunder with respect to any loss, liability,
action, suit, judgment, demand, damage, cost or expense
resulting from or attributable to the gross negligence or
wilful misconduct of such Bank, the Agent, the Collateral
Agent or the FI Trustee or such other Person. If any
action, suit or proceeding arising from any of the foregoing
is brought against any Bank, the Agent, the Collateral Agent
or the FI Trustee or any other Person indemnified or
intended to be indemnified pursuant to this Section 10.4, FI
and the Guarantors, to the extent and in the manner directed
by such indemnified party, will resist and defend such
action, suit or proceeding or cause the same to be resisted
and defended by counsel designated by FTX (which counsel
shall be satisfactory to such Bank, the Agent, the
Collateral Agent or the FI Trustee or other Person indemnified
or intended to be indemnified). If either Guarantor or
FI shall fail to do any act or thing which it has covenanted
to do hereunder or any representation or warranty on the
part of such Guarantor or FI contained in this Agreement
shall be breached, any Bank, the Agent, the Collateral Agent
or the FI Trustee may (but shall not be obligated to) do the
same or cause it to be done or remedy any such breach, and
may expend its funds for such purpose. Any and all amounts
so expended by any Bank, the Agent, the Collateral Agent or
the FI Trustee shall be repayable to it by such Guarantor or
FI immediately upon such Bank's or the Agent's demand
therefor.
(b) The provisions of this Section 10.4 shall
remain operative and in full force and effect regardless of
the expiration of the term of this Agreement or the FTX
Credit Agreement, the consummation of the transactions
contemplated hereby or thereby, the repayment of any of the
Corporate Group Loans or any Corporate Group Notes, the
invalidity or unenforceability of any term or provision of
this Agreement or the FTX Credit Agreement or any Corporate
Group Note, or any investigation made by or on behalf of any
Bank, the Agent, any FTX Lender or the FTX Agent. All
amounts due under this Section 10.4 shall be payable on
written demand therefor.
SECTION 10.5. Right of Setoff. If an Event of
Default shall have occurred and be continuing and any Bank
shall have requested the Agent to declare the Promissory
Notes immediately due and payable pursuant to Article VII,
then each Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Bank to or for the
credit or the account of FI against any of and all the
obligations of FI now or hereafter existing under this
Agreement and the Promissory Notes held by such Bank,
irrespective of whether or not such Bank shall have made any
demand under this Agreement or such Promissory Notes and
although such obligations may be unmatured. Each Bank
agrees promptly to notify Fi after any such setoff and
application made by such Bank, but the failure to give such
notice shall not affect the validity of such setoff and
application. The rights of each Bank under this Section are
in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Bank may
have.
SECTION 10.6. APPLICABLE LAW. THIS AGREEMENT AND
THE PROMISSORY NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 10.7. Waivers; Amendments. (a) No
failure or delay of any Bank, the Agent or the FI Trustee in
exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and
remedies of the Banks, the Agent and the FI Trustee
hereunder and under the other documents and agreements
entered into in connection herewith are cumulative and not
exclusive of any rights or remedies which they would otherwise
have. No waiver of any provision of this Agreement or
any Promissory Note or any other such document or agreement
or consent to any departure by FI therefrom shall in any
event be effective unless the same shall be authorized as
provided in paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on FI
in any case shall entitle FI to any other or further notice
or demand in similar or other circumstances. Each holder of
any of the Promissory Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided
herein, whether or not such Promissory Note shall have been
marked to indicate such amendment, modification, waiver or
consent.
(b) Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by FI and
the Required Banks; provided, however, that no such
agreement shall (i) change the principal amount of, or
extend or advance the maturity of or any date for the
payment of any principal or of interest on, any Promissory
Note (including, without limitation, any such payment
pursuant to Section 3.8 or paragraphs (b), (c) or (d) of
Section 3.10), or waive or excuse any such payment or any
part thereof, or change the rate of interest on any
Promissory Note, without the written consent of each holder
affected thereby, (ii) change the Commitment of any Bank
without the written consent of such Bank, or change any fees
to be paid to any Bank or the Agent hereunder without the
written consent of such Bank or the Agent, as applicable,
(iii) amend or modify the provisions of this Section,
Sections 3.9 through 3.16 or Section 10.4 or Article IX
or the definition of "Required Banks" or "Required Borrowing
Base Banks", without the written consent of each Bank,
(iv) release the collateral granted as security for the
FI Obligations (except as expressly contemplated hereby),
without the written consent of each Bank or (v) release
any Guarantor of its obligations hereunder without the
written consent of each Bank; and provided further that
no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agent hereunder without the
written consent of the Agent. Each Bank and holder of
any Promissory Note shall be bound by any modification or
amendment authorized by this Section regardless of whether
its Promissory Notes shall be marked to make reference
thereto, and any consent by any Bank or holder of a
Promissory Note pursuant to this Section shall bind any
person subsequently acquiring a Promissory Note from it,
whether or not such Promissory Note shall be so marked.
SECTION 10.8. Severability. In the event any one
or more of the provisions contained in this Agreement or in
the Promissory Notes should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein
or therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 10.9. Counterparts. This Agreement may
be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together
shall constitute but one contract, and shall become effective
when copies hereof which, when taken together, bear the
signatures of each of the parties hereto shall be delivered
or mailed to the Agent and FI.
SECTION 10.10. Headings. Article and Section
headings and the Table of Contents used herein are for
convenience of reference only and are not to affect the
construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 10.11. Entire Agreement. The Corporate
Group Facility, the fee letters between the Agent and FTX
and the exhibits and schedules hereto contain the entire
agreement among the parties hereto with respect to the Loans
and the related transactions. Any previous agreement among
the parties with respect to the subject matter hereof is
superseded by the Corporate Group Facility, such fee letters
and the agreements set forth as exhibits hereto. Nothing in
the Corporate Group Facility or in such other documents,
expressed or implied, is intended to confer upon any party
other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this
Agreement, such fee letters or the agreements set forth as
exhibits hereto.
SECTION 10.12. Amendment Closing Date. This
Agreement, as amended herein, shall be effective on the
Amendment Closing Date.
SECTION 10.13. WAIVER OF JURY TRIAL, ETC.
(a) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY DOCUMENT OR
AGREEMENT ENTERED INTO IN CONNECTION HEREWITH AND ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(b) Except as prohibited by law, each party
hereto hereby waives any right it may have to claim or
recover in any litigation referred to in paragraph (a) of
this Section any special, indirect, exemplary, punitive or
consequential damages or any damages other than, or in
addition to, actual damages.
(c) Each party hereto (i) certifies that no
representative, agent or attorney of any Bank has represented,
expressly or otherwise, that such Bank would not, in
the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that it has been induced to
enter into this Agreement or any other document, as applicable,
by, among other things, the mutual waivers and
certifications herein.
SECTION 10.14. Interest Rate Limitation. Notwithstanding
anything herein or in the Promissory Notes to
the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as
interest under applicable law (collectively the "Charges"),
as provided for herein or in any other document executed in
connection herewith, or otherwise contracted for, charged,
received, taken or reserved by any Bank, shall exceed the
maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by such
Bank in accordance with applicable law, the rate of interest
payable under the Promissory Note held by such Bank, together
with all Charges payable to such Bank, shall be limited
to the Maximum Rate.
SECTION 10.15. JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) EACH GUARANTOR AND FI HEREBY IRREVOCABLY
AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW
YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO
THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF
THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED
IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT
SHALL AFFECT ANY RIGHT THAT ANY BANK, THE AGENT OR THE FI
TRUSTEE MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY AGAINST FI OR EITHER GUARANTOR OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.
(b) EACH GUARANTOR AND FI HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY
AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY NEW YORK
STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 10.01. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 10.16. Confidentiality. Each Bank agrees
(which agreement shall survive the termination of this
Agreement) that financial information, information from
FTX's and its Subsidiaries' books and records, information
concerning FTX's and its Subsidiaries' trade secrets and
patents and any other information received from FTX and its
Subsidiaries hereunder shall be treated as confidential by
such Bank, and each Bank agrees to use its best efforts to
ensure that such information is not published, disclosed or
otherwise divulged to anyone other than employees or
officers of such Bank and its counsel and agents; provided
that it is understood that the foregoing shall not apply to:
(i) disclosure made with the prior written authorization
of FTX;
(ii) disclosure of information (other than that
received from FTX and its Subsidiaries prior to or
under this Agreement) already known by, or in the
possession of, such Bank without restrictions on the
disclosure thereof at the time such information is
supplied to such Bank by FTX or a Subsidiary hereunder;
(iii) disclosure of information which is required by
applicable law or to a governmental agency having
supervisory authority over any party hereto;
(iv) disclosure of information in connection with
any suit, action or proceeding in connection with the
enforcement of rights hereunder or in connection with
the transaction contemplated hereby or thereby;
(v) disclosure to any bank (or other financial
institution) which may acquire a participation or other
interest in the Loans or rights of any Bank hereunder;
provided that such bank (or other financial institution)
agrees to maintain any such information to be
received in accordance with the provisions of this
Section 10.16;
(vi) disclosure by any party hereto to any other
party hereto or their counsel or agents;
(vii) disclosure by any party hereto to any entity,
or to any subsidiary of such an entity, which owns,
directly or indirectly, more than 50% of the voting
stock of such party, or to any subsidiary of such an
entity; or
(viii) disclosure of information that prior to such
disclosure has become public knowledge through no
violation of this Agreement.
SECTION 10.17. Judgment Currency. The
specification of payment in Dollars and in New York City,
New York, with respect to amounts payable to any Bank (or
Transferee), the Agent or the FI Trustee hereunder and under
the other Loan Documents is of the essence, and Dollars
shall be the currency of account in all events. The payment
obligations of FI or either Guarantor under this Agreement
or any other Loan Document shall not be discharged by an
amount paid in another currency or in another place, whether
pursuant to a judgment or otherwise, to the extent that the
amount so paid on conversion to Dollars and transfer to New
York City under normal banking procedures does not yield the
amount of Dollars in New York City due hereunder. If for
the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into
another currency (the "second currency"), the rate of
exchange which shall be applied shall be that at which in
accordance with normal banking procedures the Agent could
purchase Dollars with the second currency on the Business
Day next preceding that on which such judgment is rendered.
The obligation of FI and each Guarantor in respect of any
such sum due from it to the Agent, the FI Trustee or any
Bank (or Transferee) hereunder or under any other Loan
Document (an "entitled person") shall, notwithstanding the
rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the
Business Day following receipt by such entitled person of
any sum adjudged to be due hereunder or under any other Loan
Document in the second currency such entitled person may in
accordance with normal banking procedures purchase in the
free market and transfer to New York City Dollars with the
amount of the second currency so adjudged to be due; and FI
and each Guarantor hereby agree, as a separate obligation
and notwithstanding any such judgment, jointly and severally
to indemnify such entitled person against, and to pay such
entitled person on demand, in Dollars in New York City, the
difference between the sum originally due to such entitled
person in Dollars and the amount of Dollars so purchased and
transferred.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above
written.
P.T. FREEPORT INDONESIA
INDONESIA COMPANY,
by
/s/_____________________
Name: Robert M. Wohleber
Title: Vice President and
Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert M. Wohleber
Vice President and
Treasurer
Telex: 8109515386
Telephone: 504-582-1758
Telecopy: 504-582-4511
FREEPORT-McMoRan INC.,
by
/s/_____________________
Name: Robert M. Wohleber
Title: Vice President and
Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert M.Wohleber
Vice President
and Treasurer
Telex: 8109515386
Telephone: 504-582-1758
Telecopy: 504-582-4511
FREEPORT-McMoRan COPPER & GOLD
INC.,
by
/s/_____________________
Name: Robert M. Wohleber
Title: Vice President and
Treasurer
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: Robert M. Wohleber
Vice President and
Treasuer
Telex: 8109515386
Telephone: 504-582-1758
Telecopy: 504-582-4511
CHEMICAL BANK, individually and as
Agent,
by
/s/_____________________
Name: Mary Jo Woodford
Title: Vice President
Domestic Office and LIBOR Office:
270 Park Avenue
New York, New York 10017
Attention: Mary Jo Woodford
Telephone: 212-270-8895
with a copy to
John Gehebe
Chemical Bank
270 Park Avenue
New York, New York 10017
Telephone: 212-270-3531
Telecopy: 212-270-3871
with copies to:
Agent Bank Services
140 East 45th Street
New York, New York 10017
Attention: Hilma Gabbidon
Telephone: 212-622-0693
Telex: 353006 ABSCNYK
Telecopy: 212-622-0002
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (for purposes of
Article VIII only), as FI Trustee,
by
/s/_____________________
Name: P.J. Crowley
Title: Vice President
Exhibit 4.11
EXECUTION COPY
FIRST AMENDMENT dated as of February 2, 1994 (this
"Amendment"), to the Credit Agreement dated as of
October 27, 1989, as amended through June 1, 1993 (the
"Credit Agreement"), among P.T. FREEPORT INDONESIA
COMPANY, a limited liability company organized under
the laws of Indonesia and also domesticated in Delaware
("FI"), FREEPORT-McMoRan INC., a Delaware corporation
("FTX"), FREEPORT-McMoRan COPPER & GOLD INC., a
Delaware corporation ("FCX"), the undersigned banks
(collectively, the "Banks"), MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, a New York banking corporation
(for purposes of Article VIII thereof only), as trustee
for the Banks under the FI Trust Agreement and, in such
capacity, as security agent for the Banks under the FI
Security Documents (in such capacity, the "FI Trustee")
and CHEMICAL BANK, a New York banking corporation, as
agent for the Banks (in such capacity, the "Agent").
Capitalized terms used herein and not otherwise defined
herein shall have the meanings given such terms in the
Credit Agreement.
WHEREAS, FI, FTX, FCX, the Required Banks, the FI Trustee and the
Agent have agreed that certain provisions of the Credit Agreement be
amended in order that FRP may issue up to $150,000,000 aggregate principal
amount of its Senior Subordinated Notes due 2004 (the "Securities"), as
more particularly described in the Term Sheet relating to the Securities
(the "Term Sheet") attached hereto as Exhibit A, which FRP has provided to
the Banks.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, FI, FTX, FCX, the FI
Trustee, the Agent and the Required Banks hereby agree, on the terms and
subject to the conditions set forth herein, as follows:
SECTION 1. Approval of Form of the Securities. The Required
Banks hereby approve the form of subordination provisions of the Securities
attached hereto as Exhibit B and the other terms and conditions of the
Securities as set forth in the Term Sheet and agree that FRP may, upon the
effectiveness of this Amendment, issue the Securities with subordination
provisions in the form of Exhibit B hereto and otherwise on the terms set
forth in Exhibit A hereto.
SECTION 2. Amendments to the Credit Agreement; Consent. (a)
Section 1.1 of the Credit Agreement is hereby amended by deleting clause
(ii) in the definition of "Equity Payment" and substituting a new clause
(ii) as follows:
"(ii) open market purchases by the Company or any Restricted Subsidiary
of Depository Units of FRP or purchases or acquisitions, directly or
indirectly, of any FRP Notes"
(b) Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition:
"'FRP Notes' has the meaning assigned to such term in Section
5.2(g)(i)(G)."
(c) The Banks hereby consent to the amendment of Section 2.2 of
the FTX Credit Agreement by adding a new clause (VI) thereto as follows and
renumbering the existing clause "(VI)" as "(VII)":
", (VI) FTX, FRP or any Restricted Subsidiary shall determine to,
or shall be required to make, any optional or mandatory
prepayment, acquisition, repurchase or defeasance of the FRP
Notes"
and to the amendment of Section 2.4 of the FTX Credit Agreement by changing
the reference to "clause (VI)" of Section 2.2 of the FTX Credit Agreement
to "clause (VII)" thereof.
(d) The Banks hereby consent to the amendment of Section 2.6 of
the FTX Credit Agreement by the addition of the following at the end
thereof:
"If a Borrowing Base redetermination shall occur pursuant to
clause (VI) of Section 2.2 because a 'Change in Control' (as
defined in the indenture for the FRP Notes) has occurred which
would require any offer to repurchase or redeem the FRP Notes or
would permit the holders of the FRP Notes to require the FRP Notes
to be prepaid, redeemed or repurchased, FTX and FRP acknowledge
and agree that in making such redetermination of the Borrowing
Base, the Banks may take into account such factors relating to the
Change of Control as they shall, in their sole and unreviewable
discretion, determine to be relevant or appropriate, including
without limitation any perceived or prior lack of creditworthiness
of the entity to result after such Change in Control, discounts to
the value, timing or liklihood of realization of assets of FRP,
FTX and their Subsidiaries or any other risks, whether or not
similar to the foregoing. FTX and FRP irrevocably and
unconditionally agree that they shall not contest or dispute any
such redetermination of the Borrowing Base under any circumstance
or claim whatsoever."
(e) Section 5.1(a)(5) is hereby amended by the addition of the
following at the end thereof;
", and 15 days prior written notice of any event referred to in
Section 2.2(VI) of the FTX Credit Agreement, specifying the event
in question in reasonable detail"
(f) Section 5.2(c) of the Credit Agreement is hereby amended by
adding a new sentence to the end thereof as follows:
"Notwithstanding the foregoing, FTX and FRP shall not permit any
Restricted Subsidiary which is not FRP or a Subsidiary of FRP as
of January 1, 1994 (a "Non-FRP Subsidiary"), to merge or liquidate
into or consolidate with FRP or any Subsidiary of FRP or to sell,
lease, transfer or otherwise dispose of all or any significant
percentage of the assets of any such Non-FRP Subsidiary to FRP or
any of FRP's Subsidiaries nor shall FTX or FRP otherwise permit
any Non-FRP Subsidiary to become a Subsidiary of FRP; provided
that FRP and its Subsidiaries may create or acquire new
Subsidiaries to the extent otherwise permitted hereby so long as
such Subsidiaries were not previously Non-FRP Subsidiaries."
(g) Section 5.2(g)(i) of the Credit Agreement is hereby amended
by deleting the word "and" at the end of clause (E), by substituting ";
and" for the period at the end of clause (F) and by adding the following
new clause (G) as follows:
"(G) $150,000,000 of aggregate principal amount of FRP's Senior
Subordinated Notes due 2004 (the 'FRP Notes')."
(h) Section 5.2 of the Credit Agreement is hereby amended by the
addition of a new paragraph (t) as follows:
"(t) FRP Notes. The FRP Obligations (as defined in Section 9.1)
shall not cease to be at all times 'Senior Debt' as such term is
used in the indenture for the FRP Notes and that FRP will not
amend, waive or modify any provision of such indenture or of the
FRP Notes without the prior written consent of the Required Banks.
Without limitation of the foregoing, none of FTX, FRP or any
Restricted Subsidiary shall, directly or indirectly, make any
optional or mandatory prepayment, acquisition, repurchase or
defeasance of the FRP Notes if after any Borrowing Base
redetermination pursuant to Section 2.2(VI) of the FTX Credit
Agreement, the Company would be out of compliance with Sections
3.2 and/or 5.2(b) after giving effect to such prepayment,
acquisition, repurchase or defeasance."
(i) Section 5.3 of the Credit Agreement is hereby amended by
adding the following to the end of the first sentence thereof:
", including the provisions of Section 5.2(r) and (t)."
SECTION 3. Conditions to Effectiveness. This Amendment shall
become effective on the date of receipt (the "Effective Date") by the Agent
of executed counterparts of this Amendment which, when taken together, bear
the signatures of FI, FTX, FCX, the FI Trustee, the Agent and the Required
Banks.
SECTION 4. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall constitute an original, but all
of which when taken together shall constitute but one instrument.
SECTION 5. Limited Effect. Sections 1 and 2 hereof constitute a
modification and amendment of the Credit Agreement effective as of the
Effective Date. Except as, and until, expressly waived or modified by such
Sections 1 and 2 hereof as of the Effective Date, the Credit Agreement
shall continue in full force and effect in accordance with the provisions
thereof as in effect immediately prior to the Effective Date. Except as
expressly set forth herein, this Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of or otherwise affect the
rights and remedies of the Banks, the FI Trustee and the Agent under the
Credit Agreement, nor alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement, all of which are ratified and affirmed in all respects
and shall continue in full force and effect. This Amendment shall apply
and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Expenses. FTX shall pay all out-of-pocket expenses
incurred by the Agent in connection with the preparation of this Amendment,
including, but not limited to, the reasonable fees and disbursements of
Cravath, Swaine & Moore, special counsel for the Agent.
SECTION 8. Headings. The headings of this Amendment are for
reference only and shall not limit or otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their duly authorized officers or agents as of the date
first above written.
P.T. FREEPORT INDONESIA
COMPANY,
by
___________________________
Name:
Title:
FREEPORT-McMoRan INC.,
by
____________________________
Name:
Title:
FREEPORT-McMoRan COPPER & GOLD
INC.,
by
___________________________
Name:
Title:
CHEMICAL BANK, individually and
as Agent,
by
____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK (for purposes of
Article VIII only), as FI
Trustee,
by
____________________________
Name:
Title:
ABN AMRO BANK, N.V.,
by
____________________________
Name:
Title:
____________________________
Name:
Title:
ARAB BANKING CORPORATION,
(B.S.C.),
by
_____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
_____________________________
Name:
Title:
BANQUE PARIBAS,
by
_____________________________
Name:
Title:
BARCLAYS BANK PLC,
by
_____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
by
_____________________________
Name:
Title:
CHRISTIANA BANK,
by
_____________________________
Name:
Title:
_____________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
DEUTSCHE BANK AG, New York
Branch and/or Cayman Islands
Branch,
by
_____________________________
Name:
Title:
_____________________________
Name:
Title:
FIRST NATIONAL BANK OF
COMMERCE,
by
_____________________________
Name:
Title:
THE FUJI BANK, LIMITED,
by
_____________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LTD., New York Branch,
by
_____________________________
Name:
Title:
LTCB TRUST COMPANY,
by
_____________________________
Name:
Title:
MELLON BANK, N.A.,
by
_____________________________
Name:
Title:
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, New York
Branch,
by
_____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by
_____________________________
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
by
_____________________________
Name:
Title:
NBD BANK, N.A.,
by
_____________________________
Name:
Title:
N.M. ROTHSCHILD & SONS LIMITED,
by
_____________________________
Name:
Title:
P.T. BANK RAKYAT INDONESIA
(PERSERO),
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
BANK OF TOKYO TRUST COMPANY,
by
_____________________________
Name:
Title:
SOCIETE GENERALE,
by
_____________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, New York and
Cayman Islands Branches,
by
_____________________________
Name:
Title:
_____________________________
Name:
Title:
YASUDA TRUST AND BANKING
COMPANY, LIMITED,
by
_____________________________
Name:
Title:
Exhibit 4.12
SECOND AMENDMENT dated as of March 1, 1994 (this
"Amendment"), to the Credit Agreement dated as of
October 27, 1989, as amended and restated as of June 1,
1993 (as further amended by the First Amendment dated
as of February 2, 1994, the "Credit Agreement"), among
P.T. FREEPORT INDONESIA COMPANY, a limited liability
company organized under the laws of Indonesia and also
domesticated in Delaware ("FI"), FREEPORT-McMoRan INC.,
a Delaware corporation ("FTX"), FREEPORT-McMoRan COPPER
& GOLD INC., a Delaware corporation ("FCX"), the
undersigned banks (collectively, the "Banks"), MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking
corporation (for purposes of Article VIII of the Credit
Agreement only), as trustee for the Banks under the FI
Trust Agreement and, in such capacity, as security
agent for the Banks under the FI Security Documents (in
such capacity, the "FI Trustee") and CHEMICAL BANK, a
New York banking corporation, as agent for the Banks
(in such capacity, the "Agent"). Capitalized terms
used herein and not otherwise defined herein shall have
the meanings given such terms in the Credit Agreement.
WHEREAS, FI, FTX, FCX, the Required Banks, the FI Trustee and the
Agent have agreed that certain provisions of the Credit Agreement be
amended in order that P.T. ALatieF Freeport Finance Company B.V., a
corporation organized under the laws of The Netherlands ("ALatieF B.V.")
which is a wholly owned subsidiary of FCX, may issue up to $180,000,000
aggregate principal amount of its Senior Notes due 2001 to be guaranteed by
FCX (the "Securities"), as more particularly described in the Registration
Statement on Form S-3 relating to the Securities (the "Registration
Statement") attached hereto as Exhibit A, which FCX has provided to the
Banks. Any proceeds of issuance of the Securities in excess of
$120,000,000 will be applied to prepay loans under the Chase ALatieF
Agreement referred to in Section 2(j) hereof.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, FI, FTX, FCX, the FI
Trustee, the Agent and the
Required Banks hereby agree, on the terms and subject to the conditions set
forth herein, as follows:
SECTION 1. Approval of Form of the Securities. The Required
Banks hereby approve the terms and conditions of the Securities, the
Underlying Notes (as defined in the Registration Statement) and PT-FI Note
(as defined in the Registration Statement) as set forth in the Registration
Statement and agree that, subject to approval by the Agent of the indenture
relating to the Securities and the forms of the Underlying Notes and the
PT-FI Note as being in accordance with the terms for the Securities set
forth in the Registration Statement, upon the effectiveness of this
Amendment, (a) ALatieF B.V. may issue the Securities, (b) ALatieF B.V.
may loan the proceeds of the Securities to FI pursuant to the PT-FI Note
and (c) FCX may guarantee the Securities, in each case on the terms set
forth in the Registration Statement. FTX and FCX agree that ALatieF B.V.
shall be a Restricted Subsidiary for all purposes under the Credit
Agreement and the FTX Credit Agreement.
SECTION 2. Amendments to the Credit Agreement; Consent. (a)
Section 1.1 of the Credit Agreement is hereby amended by renumbering the
existing clause (iii) in the definition of "Equity Payment" as clause (iv),
and inserting immediately after clause (ii), a new clause (iii) as follows:
", (iii) purchases or acquisitions, directly or indirectly, of any
B.V. Notes except to the extent made with cash of, or proceeds of
dispositions of assets owned by, ALatieF-FI and/or any Infrastructure
Affiliate (as defined in the Registration Statement on Form S-3 (the
"B.V. Registration Statement") relating to the B.V. Notes), and"
(b) Section 1.1 of the Credit Agreement is hereby amended by
adding the following definition:
"'B.V. Notes' has the meaning assigned to such term in Section
5.2(g)(i)(H)."
(c) The Banks hereby consent to the amendment of Section 2.2 of
the FTX Credit Agreement by adding a new clause (VII) thereto as follows
and renumbering the existing clause "(VII)" as "(VIII)":
", (VII) FTX, FCX or any Restricted Subsidiary shall determine
to, or shall be required to make, any optional or mandatory
prepayment, acquisition, repurchase or defeasance of the B.V.
Notes"
(d) The Banks hereby consent to the amendment of Section 2.4 of
the FTX Credit Agreement by substituting the following for the words "or
(VII)" appearing therein:
", (VI) (but only so long as no optional or mandatory
prepayment, acquisition, repurchase or defeasance of the FRP
Notes shall occur or be committed to on a binding basis), (VII)
(but only so long as no optional or mandatory prepayment,
acquisition, repurchase or defeasance of the B.V. Notes shall
occur or be committed to on a binding basis) or (VIII)"
(e) The Banks hereby consent to the amendment of Section 2.6 of
the FTX Credit Agreement by the replacement of the last two sentences
thereof, as modified by the First Amendment to the FTX Credit Agreement,
with the following:
"If a Borrowing Base redetermination shall occur pursuant to
clause (VI) or clause (VII) of Section 2.2 because a 'Change in
Control' (as defined in the indenture for the FRP Notes) or a
'Repurchase Event' (as defined in the indenture for the B.V.
Notes) has occurred which would require any offer to repurchase
or redeem the FRP Notes or B.V. Notes, or would permit the
holders of the FRP Notes or B.V. Notes to require the FRP Notes
or B.V. Notes, as applicable, to be prepaid, redeemed or
repurchased, FTX and FRP acknowledge and agree that in making
such redetermination of the Borrowing Base, the Banks may take
into account such factors relating to the Change of Control or
Repurchase Event as they shall, in their sole and unreviewable
discretion, determine to be relevant or appropriate, including
without limitation any perceived or prior lack of
creditworthiness of the entity to result after such Change in
Control or Repurchase Event, discounts to the value, timing or
likelihood of realization of assets of FRP, FTX and their
Subsidiaries or any other risks, whether or not similar to the
foregoing. FTX and FRP irrevocably and unconditionally agree
that they shall not contest or dispute any such redetermination
of the Borrowing Base under any circumstance or claim
whatsoever."
(f) Section 5.1(a)(5) of the Credit Agreement is hereby amended
by the insertion of "or (VII)" immediately after the reference to "Section
2.2(VI)", as incorporated by the First Amendment to the Credit Agreement.
(g) Section 5.2(c) of the Credit Agreement is hereby amended by
adding a new sentence to the end thereof as follows:
"Notwithstanding the foregoing, FTX and FCX shall not permit any
Restricted Subsidiary which is not FI or a direct or indirect
Subsidiary of FCX as of January 1, 1994 (a "Non-FCX Subsidiary"),
to merge or liquidate into or consolidate with FCX, FI or any
Subsidiary of FCX or to sell, lease, transfer or otherwise
dispose of all or any significant percentage of the assets of any
such Non-FCX Subsidiary to FCX, FI or any of FCX's Subsidiaries
nor shall FTX, FCX or FI otherwise permit any Non-FCX Subsidiary
to become a Subsidiary of FCX; provided that FCX and its
Subsidiaries may create or acquire new Subsidiaries to the extent
otherwise permitted hereby so long as such Subsidiaries were not
previously Non-FCX Subsidiaries."
(h) Section 5.2(g)(i) of the Credit Agreement is hereby amended
by deleting the word "and" at the end of clause (F), by substituting ";
and" for the period at the end of clause (G) and by adding the following
new clause (H) as follows:
"(H) ($180,000,000) of aggregate principal amount of P.T.
ALatieF Freeport Finance Company B.V.'s Senior Notes due 2001
(the 'B.V. Notes'), the Guarantee by FCX of the B.V. Notes and
the PT-FI Note (as defined in the B.V. Registration Statement)."
(i) Section 5.2(o) of the Credit Agreement is hereby amended by
substituting a "," for the word "and" prior to clause (ix) thereof and
inserting the following as a new clause (x):
"and (x) the advance by P.T. ALatieF Freeport Finance Company
B.V. of the proceeds of the B.V. Notes to FI on the terms of the
PT-FI Note (as defined in the B.V. Registration Statement)"
(j) Section 5.2 of the Credit Agreement is hereby amended by the
addition of new paragraphs (u), (v), (w) and (x) as follows:
"(u) B.V. Notes. None of FTX, FCX or any Restricted Subsidiary
shall, directly or indirectly, make any optional or mandatory
prepayment, acquisition, repurchase or defeasance of the B.V.
Notes if after any Borrowing Base redetermination pursuant to
Section 2.2(VII) of the FTX Credit Agreement, the Company would
be out of compliance with Sections 3.2 and/or 5.2(b) thereof
after giving effect to such prepayment, acquisition, repurchase
or defeasance.
(v) Chase Borrowings. After the date of issuance of the B.V.
Notes, FTX and FI shall not permit the aggregate principal amount
of outstanding borrowings under the Credit Agreement dated as of
December 15, 1993, among ALatief-FI, The Chase Manhattan Bank
(National Association), as agent, and certain banks party thereto
(the "Chase-ALatieF Agreement"), to exceed (x) $60,000,000 minus
(y) the initial proceeds of the B.V. Notes in excess of
$120,000,000, nor shall FTX and FI permit ALatief-FI or any
Infrastructure Affiliate (as defined in the B.V. Registration
Statement) to grant any additional security or collateral to
secure any indebtedness or other obligations under the Chase-
ALatieF Agreement (other than as required thereunder with respect
to substitution or replacement of existing collateral), unless
the Banks shall have the right, upon compliance with the
requirements of the related Master Services Agreement (as defined
in the B.V. Registration Statement) or such other similar
document, to have continued use of the facilities with respect to
which such additional security or collateral is granted after any
default by FI; provided, however, that this paragraph (v) shall
not be deemed to prevent FI or ALatief-FI from complying with the
requirements of Section 8.23(b) of the Chase-ALatief Agreement,
so long as assets so transferred continue to be subject to any
Master Services Agreement (as defined in the B.V. Registration
Statement) or such other similar agreement in a form approved by
the Agent.
(w) Service Contract Amendments. FTX, FCX and FI shall not
enter into, or permit, without the prior written consent of the
Agent, any amendment or modification to any Master Services
Agreement (as defined in the B.V. Registration Statement) or any
other similar agreement relating to FI's rights to use any asset
referred to in Section 8.1(i)(B)(ii) or (iii), which would, in
any manner, materially adversely affect the Banks or the ability
of FI to comply with the provisions of the Credit Agreement,
including without limitation, the right of the Banks, upon
compliance with the requirements of the Master Services Agreement
or such other agreement, to have continued use of any facilities
comprising the Enhanced Infrastructure Project (as defined in the
B.V. Registration Statement) or any other asset referred to in
Section 8.1(i)(B)(ii) or (iii) after any default by FI; provided,
however, that with respect to any such agreement, the consent
required by this Section 5.2(w) shall be deemed to have been
granted if such agreement is substantially in the approved form
heretofore entered into in connection with the ALatief-FI
Transfer. FTX, FCX and FI shall promptly notify the Agent of any
proposed amendment or modification contemplated by this Section
5.2(w).
(x) Joint Venture Agreements. FTX, FCX and FI shall not enter
into, or permit, without the prior written consent of the Agent,
any joint venture agreement, or amendment thereto, for any
entity, including any Infrastructure Affiliate (as defined in the
B.V. Registration Statement) (other than ALatief-FI), receiving
infrastructure assets related to the Enhanced Infrastructure
Project (as defined in the B.V. Registration Statement) or any
other asset referred to in Section 8.1(i)(B)(ii) or (iii);
provided, however, that with respect to any such agreement, the
consent required by this Section 5.2(x) shall be deemed to have
been granted if such agreement is substantially in the approved
form of the ALatief-FI Joint Venture Agreement."
SECTION 3. Conditions to Effectiveness. This Amendment shall
become effective on the date of receipt (the "Effective Date") by the Agent
of executed counterparts of this Consent which, when taken together, bear
the signatures of FI, FTX, FCX and the Required Banks.
SECTION 4. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall constitute an original, but all
of which when taken together shall constitute but one instrument.
SECTION 5. Limited Effect. Sections 1 and 2 hereof constitute a
modification and amendment of the Credit Agreement effective as of the
Effective Date. Except as, and until, expressly waived or modified by such
Sections 1 and 2 hereof as of the Effective Date, the Credit Agreement
shall continue in full force and effect in accordance with the provisions
thereof as in effect immediately prior to the Effective Date. Except as
expressly set forth herein, this Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of or otherwise affect the
rights and remedies of the Banks, the FI Trustee and the Agent under the
Credit Agreement, nor alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement, all of which are ratified and affirmed in all respects
and shall continue in full force and effect. This Amendment shall apply
and be effective only with respect to the provisions of the Credit
Agreement specifically referred to herein.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Expenses. FTX shall pay all out-of-pocket expenses
incurred by the Agent in connection with the preparation of this Amendment,
including, but not limited to, the reasonable fees and disbursements of
Cravath, Swaine & Moore, special counsel for the Agent.
SECTION 8. Headings. The headings of this Amendment are for
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 9. ALatieF B.V. Consent. By its signature below,
ALatieF B.V., although not a party to the Credit Agreement, hereby consents
and agrees to the provisions set forth herein and agrees to comply with the
provisions herein applicable to it.
IN WITNESS WHEREOF, the parties hereto have caused this Consent
to be executed by their duly authorized officers or agents as of the date
first above written.
P.T. FREEPORT INDONESIA
COMPANY,
by
___________________________
Name:
Title:
FREEPORT-McMoRan INC.,
by
____________________________
Name:
Title:
FREEPORT-McMoRan COPPER & GOLD
INC.,
by
___________________________
Name:
Title:
CHEMICAL BANK, individually and as
Agent,
by
____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK (for purposes of Article
VIII only), as FI Trustee,
by
____________________________
Name:
Title:
ABN AMRO BANK, N.V.,
by
____________________________
Name:
Title:
by
____________________________
Name:
Title:
ARAB BANKING CORPORATION, (B.S.C.),
by
_____________________________
Name:
Title:
THE BANK OF NOVA SCOTIA,
by
_____________________________
Name:
Title:
BANK OF TOKYO TRUST COMPANY,
by
_____________________________
Name:
Title:
BANQUE PARIBAS,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
BARCLAYS BANK PLC,
by
_____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
by
_____________________________
Name:
Title:
CHRISTIANIA BANK,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
DEUTSCHE BANK AG, New York Branch
and/or Cayman Islands Branch,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
FIRST NATIONAL BANK OF COMMERCE,
by
_____________________________
Name:
Title:
THE FUJI BANK, LIMITED,
by
_____________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LTD.,
New York Branch,
by
_____________________________
Name:
Title:
LTCB TRUST COMPANY,
by
_____________________________
Name:
Title:
MELLON BANK, N.A.,
by
_____________________________
Name:
Title:
THE MITSUI TRUST AND BANKING
COMPANY, LIMITED, New York Branch,
by
_____________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK,
by
_____________________________
Name:
Title:
NATIONAL WESTMINSTER BANK PLC,
by
_____________________________
Name:
Title:
NBD BANK, N.A.,
by
_____________________________
Name:
Title:
N.M. ROTHSCHILD & SONS LIMITED,
by
_____________________________
Name:
Title:
P.T. BANK RAKYAT INDONESIA
(PERSERO),
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
SOCIETE GENERALE,
by
_____________________________
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NewYork and/or Cayman
Island Branches,
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
YASUDA TRUST AND BANKING COMPANY,
LIMITED,
by
_____________________________
Name:
Title:
P.T. ALATIEF FREEPORT
FINANCE COMPANY B.V.
(for purposes of
Section 9 hereof only),
by
_____________________________
Name:
Title:
Exhibit 12.1
FREEPORT-McMoRan COPPER & GOLD INC.
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- ------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Income from continuing
operations $ 60,670 $129,893 $101,962 $ 90,179 $ 98,927
Add:
Provision for income taxes 67,589 103,726 45,585 88,330 89,624
Minority interest share of
net income 9,134 31,075 12,199 13,726 17,415
Interest expense 15,327 18,897 21,451 13,517 187
Rental expense factor(a) 3,190 876 841 693 223
-------- -------- -------- -------- --------
Earnings available for fixed
charges $155,910 $284,467 $182,038 $206,445 $206,376
======== ======== ======== ======== ========
Interest expense $ 15,327 $ 18,897 $ 21,451 $ 13,517 $ 187
Capitalized interest 24,519 23,974 18,276 8,244 7,074
Rental expense factor(a) 3,190 876 841 693 223
-------- -------- -------- -------- --------
Fixed charges $ 43,036 $ 43,747 $ 40,568 $ 22,454 $ 7,484
======== ======== ======== ======== ========
Ratio of earnings to
fixed charges(b) 3.6x 6.5x 4.5x 9.2x 27.6x
==== ==== ==== ==== =====
<FN>
a. Portion of rent which is deemed representative of interest.
b. For purposes of this calculation, earnings consist of income from
continuing operations before income taxes, minority interest and fixed
charges. Fixed charges include interest and that portion of rent deemed
representative of interest.
</TABLE>
Exhibit 13.1
FREEPORT-McMoRan COPPER & GOLD INC.
BALANCE SHEETS
December 31,
____________________
1993 1992
_____ _____
ASSETS (In Thousands)
Current assets:
Cash and short-term investments................... $ 13,798 $ 371,842
Accounts receivable:
Customers....................................... 122,527 130,587
Other........................................... 66,202 20,249
Inventories:
Products........................................ 58,247 13,911
Materials and supplies.......................... 153,681 118,347
Prepaid expenses and other........................ 13,787 6,178
__________ _________
Total current assets............................ 428,242 661,114
__________ _________
Property, plant and equipment..................... 2,172,222 1,443,939
Less accumulated depreciation and amortization.... 525,619 450,527
__________ _________
Net property, plant and equipment............... 1,646,603 993,412
__________ _________
Other assets...................................... 41,808 39,479
__________ _________
Total assets...................................... $2,116,653 $1,694,005
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities.......... $ 218,083 $ 88,876
Current portion of long-term debt and
short-term borrowings........................... 48,791 78,571
Accrued income and other taxes.................... 20,865 1,129
__________ _________
Total current liabilities....................... 287,739 168,576
Long-term debt, less current portion.............. 211,868 645,012
Accrued postretirement benefits and
other liabilities............................... 188,165 15,558
Deferred income taxes............................. 201,553 196,953
Minority interest................................. 46,781 21,449
Mandatory redeemable gold-denominated
preferred stock................................. 232,620 -
Stockholders' equity:
Special preference stock.......................... 224,400 224,400
Step-Up preferred stock........................... 350,000 -
Class A common stock, par value $.10.............. 5,802 5,318
Class B common stock, par value $.10.............. 14,213 14,213
Capital in excess of par value of common stock.... 334,166 353,697
Cumulative foreign translation adjustment......... (10,012) -
Retained earnings................................. 29,358 48,829
__________ _________
947,927 646,457
__________ _________
Total liabilities and stockholders' equity........ $2,116,653 $1,694,005
========== =========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF INCOME
Years Ended December 31,
__________________________
1993 1992 1991
____ ____ ____
(In Thousands,
Except Per Share Amounts)
Revenues....................................... $925,932 $714,315 $467,522
Cost of sales:
Site production and delivery................... 567,148 308,948 204,353
Depreciation and amortization.................. 67,906 48,272 38,397
________ ________ ________
Total cost of sales.......................... 635,054 357,220 242,750
Exploration expenses........................... 33,748 12,185 6,502
Provision for restructuring charges............ 20,795 - -
General and administrative expenses............ 81,399 68,481 40,550
________ ________ ________
Total costs and expenses..................... 770,996 437,886 289,802
________ ________ ________
Operating income............................... 154,936 276,429 177,720
Interest expense, net.......................... (15,327) (18,897) (21,451)
Other income (expense), net.................... (2,216) 7,162 3,477
________ ________ ________
Income before income taxes and minority interest 137,393 264,694 159,746
Provision for income taxes..................... (67,589) (103,726) (45,585)
Minority interest.............................. (9,134) (31,075) (12,199)
________ ________ ________
Income before changes in accounting principle.. 60,670 129,893 101,962
Cumulative effect of changes in accounting
principle, net of taxes and minority interest (9,854) - (5,803)
________ ________ ________
Net income..................................... 50,816 129,893 96,159
Preferred dividends............................ (28,954) (7,025) -
________ ________ ________
Net income applicable to common stock.......... $ 21,862 $122,868 $ 96,159
======== ======== ========
Net income per share of common stock:
Before changes in accounting principle....... $.16 $.66 $.56
Cumulative effect of changes in accounting
principle.................................... (.05) - (.03)
________ ________ ________
$.11 $.66 $.53
======== ======== ========
Average common shares outstanding.............. 197,929 187,343 182,130
======== ======== ========
Dividends per common share..................... $.60 $.60 $.55
======== ======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF CASH FLOW
Years End December 31,
__________________________
1993 1992 1991
---- ---- ----
Cash flow from operating activities: (In Thousands)
Net income.................................... $ 50,816 $129,893 $ 96,159
Adjustments to reconcile net income to net
cash provided by operating activities:
Cumulative effect of changes
in accounting principle................... 9,854 - 5,803
Depreciation and amortization............... 67,906 48,272 38,397
Provision for restructuring charges,
net of payments........................... 4,623 - -
Deferred income taxes....................... 8,512 52,154 17,052
Amortization of discount on zero coupon
exchangeable notes........................ 10,844 17,297 9,162
Minority interest's share of net income..... 9,134 31,075 12,199
(Increase) decrease in working capital,
net of effect of acquisition:
Amount due from FTX....................... - 20,000 (20,000)
Accounts receivable....................... (16,904) (77,448) (24,647)
Inventories............................... (36,669) (10,644) (50,086)
Prepaid expenses and other................ (10,503) (4,157) (939)
Accounts payable and accrued liabilities.. 32,792 44,035 (794)
Accrued income and other taxes............ 19,736 1,129 (9,988)
Other....................................... 8,404 963 1,554
________ ________ ________
Net cash provided by operating activities..... 158,545 252,569 73,872
________ ________ ________
Cash flow from investing activities:
Capital expenditures.......................... (453,122) (367,842) (239,954)
Purchase of indirect interest in PT-FI........ - (211,892) -
Acquisition of RTM, net of cash acquired...... (10,390) - -
________ ________ ________
Net cash used in investing activities......... (463,512) (579,734) (239,954)
________ ________ ________
Cash flow from financing activities:
Cash dividends paid:
Common stock................................ (118,575) (111,365) (100,171)
Preferred stock............................. (22,981) (4,407) -
Minority interest........................... (19,143) (15,643) (8,945)
Conversion of zero coupon exchangeable notes.. - (7,848) -
Proceeds from debt............................ 397,971 153,000 103,000
Repayment of debt............................. (931,439) - (10,000)
Net proceeds from infrastructure financing.... 80,000 - -
Net proceeds from sale of:
Step-Up preferred stock..................... 340,700 - -
Gold-denominated preferred stock............ 220,390 - -
Class A common stock........................ - 174,142 -
Special preference stock.................... - 217,867 -
Subsidiary interest......................... - 212,485 -
Zero coupon exchangeable notes.............. - - 218,560
________ ________ ________
Net cash provided by (used in)
financing activities........................ (53,077) 618,231 202,444
________ ________ ________
Net increase (decrease) in cash and
short-term investments...................... (358,044) 291,066 36,362
Cash and short-term investments
at beginning of year........................ 371,842 80,776 44,414
________ ________ ________
Cash and short-term investments
at end of year.............................. $ 13,798 $371,842 $ 80,776
======== ======== ========
Interest paid................................. $ 29,122 $ 22,581 $ 32,482
======== ======== ========
Income taxes paid............................. $ 39,314 $ 50,029 $ 38,521
======== ======== ========
The accompanying notes, which include information in Notes 1, 2, 3,
and 7 regarding noncash transactions, are an integral part of these
financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Years End December 31,
__________________________
1993 1992 1991
---- ---- ----
(In Thousands)
Special Preference Stock:
Balance at beginning of year................... $224,400 $ - $ -
Sale of shares to the public.................. - 224,400 -
________ ________ ________
Balance at end of year...................... 224,400 224,400 -
________ ________ ________
Step-Up Preferred Stock:
Sale of shares to the public.................. 350,000 - -
________ ________ ________
Class A common stock:
Balance at beginning of year.................. 5,318 2,000 2,000
Two-for-one stock split....................... - 2,000 -
Sale of shares to the public.................. - 863 -
Conversion of zero coupon exchangeable notes.. 484 455 -
________ ________ ________
Balance at end of year...................... 5,802 5,318 2,000
________ ________ ________
Class B common stock:
Balance at beginning of year.................. 14,213 7,106 7,106
Two-for-one stock split....................... - 7,107 -
________ ________ ________
Balance at end of year...................... 14,213 14,213 7,106
________ ________ ________
Capital in excess of par value of common stock:
Balance at beginning of year.................. 353,697 163,439 167,451
Issuance cost of Mandatory Redeemable Gold-
Denominated and Step-Up Preferred Stock..... (21,530) - -
Sale of Class A and Special Preference Stock.. - 166,746 -
Conversion of zero coupon exchangeable notes.. 79,241 69,945 -
Two-for-one stock split....................... - (9,107) -
Cash dividends on common stock................ (65,587) (37,326) (4,012)
Dividends on preferred stocks................. (11,655) - -
________ ________ ________
Balance at end of year...................... 334,166 353,697 163,439
________ ________ ________
Cumulative foreign translation adjustment:
Current year adjustment....................... (10,012) - -
________ ________ ________
Retained earnings:
Balance at beginning of year.................. 48,829 - -
Net income.................................... 50,816 129,893 96,159
Cash dividends on common stock................ (52,988) (74,039) (96,159)
Dividends on preferred stocks................. (17,299) (7,025) -
________ ________ ________
Balance at end of year...................... 29,358 48,829 -
________ ________ ________
Total stockholders' equity.................... $947,927 $646,457 $172,545
======== ======== ========
The accompanying notes are an integral part of these financial statements.
FREEPORT-McMoRan COPPER & GOLD INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation. The consolidated financial statements of
Freeport-McMoRan Copper & Gold Inc. (FCX or the Company) include its
majority-owned subsidiaries, including P.T. Freeport Indonesia
Company (PT-FI) and Rio Tinto Minera, S.A. (RTM). Reclassifications
were made to prior year financial statements to conform to the 1993
presentation. All significant intercompany transactions have been eliminated.
Cash and Short-Term Investments. The Company considers highly
liquid investments purchased with a maturity of three months
or less to be cash equivalents. PT-FI and RTM
cash is not available to FCX until cash dividends are paid to FCX.
At December 31, 1993, PT-FI's net assets totaled $184.3 million,
including $24.6 million of retained earnings.
On January 5, 1994, PT-FI declared a $42.1 million dividend
of which $36.1 million was due to FCX. At December 31, 1993,
RTM's net assets totaled $40.2 million. RTM is not
expected to pay a dividend to FCX in the near future.
Inventories. Inventories are generally stated at the lower
of cost or market. PT-FI uses the average cost method and
RTM uses the first-in, first-out (FIFO) cost method.
Property, Plant and Equipment. Property, plant and
equipment is carried at cost. Mineral exploration costs
are expensed as incurred, except in the year the property is deemed to
contain a viable mineral deposit, in which case they are capitalized.
Development costs, which include interest incurred during the
construction and development period, are capitalized.
Expenditures for replacements and improvements are capitalized.
Depreciation expense for mining and milling operations is
determined using the unit-of-production method based on
estimates of recoverable reserves. Other assets, including
RTM's smelter, are depreciated on a straight-line basis
over estimated useful lives of 15 to 20 years for buildings
and 3 to 25 years for machinery and equipment.
Hedging. PT-FI has a price protection program for virtually
all of its estimated copper sales to be priced in 1994 at an
average floor price of $.90 per pound, while allowing
full benefit from prices above that amount. The cost
of this program ($6.0 million at December 31, 1993) is
included in product inventories and will be amortized during 1994.
Based on an average 1994 forward market price of approximately
$.82 per pound of copper (December 31, 1993 forward prices per
London Metal Exchange, LME), the market value of
these contracts is approximately $56 million.
The contracts are with a diversified group
of financially strong counterparties.
RTM has forward contracts for approximately 61 percent
of its estimated 1994 gold production at $383.80 per ounce
and 38 percent of its estimated 1995 gold production at
$394.80 per ounce. RTM has also hedged approximately 53
percent and 38 percent of its estimated 1994 and 1995
silver production at $4.70 and $4.80 per ounce, respectively.
Based on a market price of $390.65 per ounce of gold and
$5.12 per ounce of silver (December 31, 1993 price per LME),
these contracts are in a loss position of approximately
$2 million. Additionally, RTM has a policy of eliminating
significant exposure to copper price fluctuations by hedging
purchases of concentrate at its smelter through the use of
forward contracts. At December 31, 1993, RTM sold forward
approximately 4.2 million pounds of its concentrate inventory
at approximately $.78 per pound of copper.
Concentrate Sales. Revenues associated with PT-FI's sales
of metal concentrates are recorded net of royalties,
treatment costs, and amortization of the cost of its price
protection program. PT-FI's concentrate sales agreements
provide for provisional billings based on world metals prices,
primarily the LME, with actual settlement generally based on
appropriate future metals prices. Revenues, recorded initially
using provisional prices, are adjusted using current prices.
At December 31, 1993, copper sales totaling 213.4
million pounds remained to be contractually priced at various
times in 1994. As a result of PT-FI's price protection program,
these pounds are recorded at an average price of $.90
per pound. Gold sales are priced according to individual
contract terms.
Foreign Translation Adjustment. The functional currency for
RTM is the Spanish peseta. RTM's assets and liabilities are
translated to U.S. dollars using the exchange rate in
effect at the balance sheet date. The cumulative results
of the translation adjustment are recorded as a separate
component of stockholders' equity. Results of operations are
translated using the average exchange rates during the period.
Gains and losses resulting from foreign currency transactions,
which were not material, are included in net income.
Changes in Accounting Principle. During 1993, the Company
adopted the following changes to accounting policies:
Periodic Scheduled Maintenance Costs - Costs related to
periodic scheduled maintenance (turnarounds) were previously
capitalized when incurred and amortized generally over six
months to two years. Effective January 1, 1993, the method
of accounting was changed to expense these costs when incurred.
Deferred Charges - The accounting for deferred charges was
changed to provide for deferral of only those costs that
directly relate to the acquisition, construction, and development
of assets and to the issuance of debt and related instruments.
Previously, certain other costs that benefitted future periods
were amortized over the periods benefitted.
Management Information Systems - Costs of management information
systems (MIS) equipment and software that have a material impact
on periodic measurement of net income are capitalized and
amortized over their estimated productive lives. Other MIS costs,
including equipment and purchased software that involve
relatively immaterial amounts (currently individual expenditures
of less than $.5 million) and short estimated productive lives
(currently less than three years) are charged to expense when incurred.
During 1993, approximately $3.5 million of equipment and purchased
software was charged to expense. Previously, most expenditures
for MIS equipment and purchased software were capitalized.
The accounting for MIS costs was changed to recognize the
rapid rate of technology change in MIS which results in short
productive lives of equipment and software and a need for
continuing investments.
The changes in accounting policy were adopted to improve
the measurement of operating results by reporting cash expenditures
as expenses when incurred unless they are directly related to
long-lived asset additions. In addition, the administrative costs of
accounting for assets will be reduced by not capitalizing and
amortizing relatively insignificant expenditures that do not
have a material effect on measuring periodic net income.
If these changes in accounting principle had not been adopted,
1993 income before changes in accounting principle would not have
been materially different from the amount reported. If the changes
in accounting principle had been applied in prior years, 1992
and 1991 net income would not have been materially different
from amounts reported.
Restructuring Charges. FCX recognized
expense of $20.8 million during 1993 for restructuring the
administrative organization (including primarily personnel
related costs and a write-off of excess office facilities)
of Freeport-McMoRan Inc. (FTX), the parent company of FCX,
the cost to downsize PT-FI's computing and MIS structure,
and a write-off of costs associated with PT-FI's previous
credit agreement. See Management's Discussion
and Analysis of Financial Condition and Results of
Operations for information about a reclassification of
restructuring charges from those previously reported resulting from
views expressed by the Securities and Exchange Commission staff.
2. OWNERSHIP IN PT-FI
In January 1991, the Government of Indonesia (the Government)
increased its ownership in PT-FI from 8.9 percent to 10 percent
by purchasing 2,242 PT-FI shares owned by FCX for
$18.1 million. FCX withholds 40 percent of PT-FI dividends
on all Government-owned shares until the non-interest bearing
receivable ($2.2 million at December 31, 1993) is satisfied.
In December 1991, FCX exchanged 21,300 shares of PT-FI
common stock for a $212.5 million subordinated promissory note
from PT-FI, reducing FCX's ownership in PT-FI to
approximately 89 percent with the remaining 11 percent being
owned by the Government. Interest on the note is due quarterly
at a rate equal to the effective rate under PT-FI's
amended credit agreement, and principal is payable in twenty
equal, quarterly installments beginning January 2000.
If interest or principal is in arrears, PT-FI cannot pay
dividends on its common stock.
In December 1991, PT-FI and the Government signed a
new contract of work (New COW) which has a 30-year term
with two 10-year extensions permitted. Under the New COW, FCX
pays the Government a royalty of 1.5 percent to 3.5 percent
on the value of copper sold, net of delivery costs and
treatment and refining charges, and a 1 percent royalty on the
sales value of gold and silver ($9.5 million in 1993,
$15.7 million in 1992, and $10.5 million in 1991).
The New COW required FCX to increase the ownership by Indonesian
entities in PT-FI to 20 percent, which was achieved
through the sale of 10 percent (21,300 shares) of PT-FI
common stock to an entity owned by Indonesian investors
on December 31, 1991.
In December 1992, FCX purchased 49 percent (10.5 million shares)
of the capital stock of the publicly traded Indonesian entity which
owned the 10 percent of PT-FI sold in 1991.
In December 1993, PT-FI issued 8,321 shares of its stock to
FCX in exchange for the conversion of certain notes (Note 7).
FCX's direct ownership in PT-FI totaled 80.8 percent and 80.0
percent at December 31, 1993 and 1992, respectively. In 1994, PT-FI
issued an additional 6,169 shares of its stock to FCX for
conversion of the remaining notes, increasing FCX's direct
ownership in PT-FI to 81.3 percent.
Each transaction discussed above used the fair market
value of FCX Class A common stock at the time of the agreements
as the basis to calculate the purchase and sale prices.
3. ACQUISITION OF RTM
In March 1993, FCX acquired a 65 percent interest in RTM,
which operates a copper smelter and a gold mine with an
estimated remaining life of fewer than four years, by investing
approximately $50 million, excluding transaction costs,
to be used by RTM for working capital requirements and
capital expenditures, including funding a portion of the costs of
the expansion of its smelter production capacity from
its current 150,000 metric tons of metal per year to 180,000
metric tons of metal per year by mid-1995. In December 1993,
RTM redeemed the remaining 35 percent interest for approximately
$19 million. Selected balance sheet information reflecting the
allocation of the purchase price to the assets
and liabilities acquired is as follows (in thousands):
Current assets...........................................$101,454
Current liabilities......................................(158,445)
Property, plant and equipment, net........................277,170
Other assets................................................5,358
Long-term debt............................................(38,941)
Accrued postretirement benefits and other liabilities....(176,206)
________
Net cash investment......................................$ 10,390
========
Unaudited pro forma data giving effect to the purchase of
RTM as if it had been acquired on January 1 of each year is as follows:
Years Ended December 31,
_________________________
1993 1992
____ ____
Revenues (000s)....................................$1,024,097 $1,176,612
Operating income (000s)...............................152,484 267,951
Net income before changes
in accounting principle (000s).......................22,578 96,760
Net income per share................................... .11 .52
The pro forma results are not necessarily indicative of the
actual results that would have been achieved nor are they indicative
of future results.
4. REDEEMABLE PREFERRED STOCK
In August 1993, FCX sold publicly 6.0 million depositary shares
representing 300,000 shares of its Gold-Denominated Preferred Stock.
Each depositary share has a cumulative quarterly cash dividend equal
to the value of 0.000875 ounces of gold and is subject to
mandatory cash redemption in August 2003 for the value of
0.1 ounces of gold. The depositary shares are recorded at
their offering price and are being reflected as a hedge
of future gold sales for accounting purposes. The net
proceeds from this offering ($220.4 million) were loaned
to PT-FI in the form of a Gold Production Payment Loan, requiring
quarterly production payments of 6,176 ounces of refined
gold bullion or the dollar equivalent thereof. Based on the
December 31, 1993 closing market price, these depositary
shares had a market value of $258.0 million.
In January 1994, 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 ($158.5 million) were
loaned to PT-FI under terms similar to the Gold Production
Payment Loan discussed above.
5. STOCKHOLDERS' EQUITY
FCX has 312.0 million authorized shares of capital stock
consisting of 110.0 million of Special stock, 200.0 million
of Class B common stock, and 2.0 million of Preferred stock.
Special and Preferred Stock. At December 31, 1993, there
were 84.4 million shares of Special stock issued and outstanding,
58.0 million as Class A common stock and 26.4
million as Special Preference Stock.
In July 1992, FCX sold publicly 8.6 million shares of
its Class A common stock and 9.0 million depositary shares.
Each depositary share represents 2-16/17 shares of its 7%
Convertible Exchangeable Special Preference Stock (Special
Preference Stock), has a cumulative annual cash dividend of $1.75
(payable quarterly) and a $25 liquidation preference, and is
convertible at the option of the holder into approximately
1.009 shares of FCX Class A common stock (equivalent to a
conversion price of $24.77 per share of FCX Class A common stock).
Beginning August 1, 1995, FCX may redeem these depositary shares
for cash at $26.225 per share (declining ratably to $25 per share
in March 2002) plus accrued and unpaid dividends. A portion
of the proceeds were used to purchase the 49 percent interest
in the publicly traded Indonesian entity which owned a 10 percent
interest in PT-FI and $145.7 million, net of $4.3 million of
expenses, was loaned to PT-FI in January 1993, in exchange
for an 8.235% Convertible Subordinated Debenture due August
1, 2007.
In July 1993, FCX sold publicly 14.0 million depositary
shares representing 700,000 shares of its Step-Up Convertible
Preferred Stock (Step-Up Preferred Stock). Each
depositary share has a cumulative annual cash dividend
of $1.25 through August 1, 1996 and thereafter $1.75
(payable quarterly) and a $25 liquidation preference, and is convertible
at the option of the holder into approximately 0.826 shares
of FCX Class A common stock (equivalent to a conversion price
of $30.28 per share of FCX Class A common stock). From
August 1, 1996 and prior to August 1, 1999, FCX may redeem
these depositary shares for approximately 0.826 shares of FCX Class A
common stock per depositary share if the market price of FCX Class A
common stock exceeds certain specified levels. Thereafter, FCX may
redeem these depositary shares at $25 per share (payable in FCX Class
A common stock, cash or a combination of both, at FCX's option)
plus accrued and unpaid dividends. The net proceeds from this
offering ($341.3 million) were loaned to PT-FI in the form of a Step-Up
Perpetual Convertible Subordinated Debenture bearing interest
at the rate of 5.88 percent per annum through August 1, 1996
and 8.235 percent thereafter on the unpaid principal amount.
6. INCOME TAXES
FCX records income taxes pursuant to Statement of Financial
Accounting Standards No. 109. Substantially all temporary
differences relate to property, plant and equipment. FCX has
provided a valuation allowance for all tax credit carryforwards
($29.5 million) as these would only be utilized should FCX be
required to pay regular U.S. tax, which FCX views as
unlikely because Indonesian taxes exceed U.S. taxes.
In addition, RTM, which is subject to a separate tax jurisdiction
(Spain), has net operating loss carryforwards totaling
approximately $108 million ($91 million pre-acquisition)
which expire from 1994 to 1998. FCX has provided a valuation
allowance for the full amount of these carryforwards as RTM
has not generated taxable income in recent years.
The provision for income taxes consists of the following:
Years Ended December 31,
____________________________
1993 1992 1991
____ ____ ____
(In Thousands)
Current income taxes:
Indonesian...................................$54,994 $ 45,996 $20,198
United States..................................3,933 5,376 3,178
State............................................150 200 150
______ ______ ______
59,077 51,572 23,526
______ ______ ______
Deferred income taxes:
Indonesian.....................................4,600 52,771 43,240
Adjustment for change in rates under New COW... - - (26,465)
United States.................................. - (617) 277
______ ______ ______
4,600 52,154 17,052
______ ______ ______
Provision for income taxes......................$63,677 $103,726 $40,578
====== ======== ======
Reconciliations of the differences between income taxes computed at the
contractual Indonesian tax rate and income taxes recorded are as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
______________________________________________________________________
1993 1992 1991
___________________ ____________________ _____________________
Percent Percent Percent
of Income of Income of Income
Before Before Before
Income Income Income
Amount Taxes Amount Taxes Amount Taxes
______ ______ ______ ______ ______ ______
(Dollar Amounts In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Income taxes computed at
contractual Indonesian rate...$42,656 35% $ 92,643 35% $62,342 42%
Indonesian tax withheld on:
Dividend payments..............19,765 16 11,732 4 - -
Interest payments...............4,170 3 - - - -
Increase (decrease) attributable to:
Adjustment for change in rates
under New COW................. - - - - (26,465) (18)
Intercompany interest expense.(18,645) (15) - - - -
RTM net loss....................5,500 5 - - - -
United States tax...............4,083 3 5,302 2 3,370 2
Other, net......................6,148 5 (5,951) (2) 1,331 1
_______ __ ________ __ _______ __
Provision for income taxes......$63,677 52% $103,726 39% $40,578 27%
====== == ======== == ======= ==
</TABLE>
7. LONG-TERM DEBT
December 31,
_______________
1993 1992
____ ____
(In Thousands)
PT-FI revolver, average rate 4.4% in 1993 and 5.1% in 1992..$ 13,000 $550,000
Zero coupon exchangeable notes...............................102,039 173,583
ALatieF joint venture bank loan (Note 10).....................60,000 -
Note payable to FTX, average rate 4.2%........................12,270 -
RTM gold and silver denominated loans, average rate 1.3%......39,284 -
RTM bank loan..................................................2,374 -
RTM short-term borrowings, average rate 11%...................31,692 -
________ _______
260,659 723,583
Less current portion and short-term borrowings................48,791 78,571
________ _______
$211,868 $645,012
======== ========
PT-FI amended its $550.0 million credit agreement in June 1993.
The amended credit agreement (the Credit Agreement), guaranteed by
FCX and FTX, is structured as a three year revolving line of credit
followed by a 3 1/2 year reducing revolver. The Credit Agreement
is part of an $800.0 million committed credit facility available
to FTX and its subsidiaries including PT-FI, and is subject to a
borrowing base, redetermined annually by the banks,
which establishes maximum consolidated debt for FTX and its
subsidiaries, including PT-FI. PT-FI's limit under the facility
is $550.0 million subject to the borrowing base discussed
above. Interest is variable and commitment fees are payable
at 0.38 percent per annum on the average daily unused commitment.
The Credit Agreement provides for working capital requirements,
specified coverage of fixed charges, and restrictions on other borrowings.
PT-FI assigned its existing and future sales contracts and pledged
its rights under the New COW and its accounts receivables and other
assets as security for its borrowings under the Credit Agreement.
As of December 31, 1993, $547.5 million was available under the current
borrowing base and $412.0 million of borrowings were unused under
the credit facility. To the extent FTX and its other subsidiaries
incur additional debt, the amount available to PT-FI under the
Credit Agreement may be reduced.
In July 1991, FCX sold $1.035 billion face amount of subordinated
Zero Coupon Exchangeable Notes (the Notes). The net proceeds were
loaned to PT-FI under similar terms. The remaining Notes outstanding
were redeemed in January 1994. Notes with a face amount of
$386.0 million, $322.6 million, and $326.4 million were presented
for exchange in 1994, 1993, and 1992, respectively, for which FCX
issued 5.8 million, 4.8 million, and 4.5 million shares of Class A
common stock, and the Company paid $.3 million in 1994 and $7.9
million in 1992. As a result of the issuance by FCX of its Class A
common stock, PT-FI issued 14,490 shares of its stock to FCX.
Had the Company called the Notes for redemption on January 1,
1993, net income would have been $.10 per common share for 1993.
In 1993, FCX borrowed funds from FTX for the acquisition
of RTM and $12.3 million was outstanding at December 31, 1993.
Interest accrues at a rate equal to the effective rate
under the Credit Agreement and was $.2 million in 1993.
RTM's gold and silver loans are payable with 107,800 ounces
of gold (9,200 ounces payable quarterly) and 953,100 ounces of silver
(105,900 ounces payable quarterly), and are carried at the market
price of gold ($331.70 per ounce) and silver ($3.70 per ounce) at the
date of FCX's acquisition. The loans are accounted for as a hedge.
Interest is calculated on the outstanding ounces at the current
prices on the date of payment. Based on the December 31, 1993
LME quotes for gold and silver, the market value of this debt was
approximately $47 million.
RTM also has several short-term credit facilities with banks.
The stated rates of interest on these loans range from 3.7 percent
to 13 percent. RTM has pledged certain of its assets as security
for these loans.
The minimum principal payments for debt scheduled for each of
the five succeeding years based on the amounts outstanding at
December 31, 1993, assuming the terms of the Credit
Agreement are not extended and the note to FTX is repaid by
borrowing from the Credit Agreement, are $48.8 million in 1994,
$18.8 million in 1995, $15.0 million in 1996, $13.5 million in 1997,
and $55.2 million in 1998.
The Company has an interest rate exchange agreement resulting
in a fixed rate of 8.3 percent on $85.7 million of financing at
December 31, 1993, reducing $14.3 million annually through December
1999. Based on market conditions at December 31, 1993, unwinding this
interest swap would cost an estimated $8.3 million.
Capitalized interest totaled $24.5 million in 1993, $24 million
in 1992, and $18.3 million in 1991.
8. MAJOR CUSTOMERS
Historically, most of PT-FI's sales have been made under long-term contracts.
The following table details the percentage of total product sold by
PT-FI to its customers:
Years Ended December 31,
_________________________
1993 1992 1991
____ ____ ____
Long-term contracts
Japanese companies.................................44% 34% 36%
Swiss firm.........................................13 13 17
German firm.........................................7 7 11
Other..............................................35 12 12
Spot sales............................................1 34 24
The contract with a group of Japanese companies extends through
December 31, 2000, whereas the contracts with the Swiss and German
firms extend through December 31, 1995 and 1994, respectively.
Certain terms of these long-term contracts are negotiated annually.
There are several other long-term agreements in place, each accounting
for less than 10 percent of 1993 sales. During 1993, PT-FI supplied
RTM with approximately 90,000 metric tons of copper concentrate and
is expected to supply approximately 150,000 metric tons in 1994,
providing for approximately 20 percent and 33 percent, respectively,
of RTM's requirements in those years. Beginning in 1996, PT-FI is
expected to provide RTM with approximately one-half of its copper
concentrate requirements.
RTM's customers are located primarily in Spain and European
Union countries, none of which accounted for over 10 percent of the
Company's total revenues.
9. TRANSACTIONS WITH FTX AND EMPLOYEE BENEFITS
Management Services Agreement. FTX furnishes general executive,
administrative, financial, accounting, legal, and certain other
services to the Company under a management services agreement
terminable by either party on December 31 in any year, upon six months
written notice. These costs, which include related overhead,
are non-interest bearing, reimbursed monthly and totaled $49.0
million in 1993 (excluding $10.7 million of restructuring costs),
$44.9 million in 1992, and $33.4 million in 1991.
Pension Plans. Substantially all the employees seconded to the
Company from FTX are covered by FTX's defined benefit plan for
salaried employees. The accumulated benefits and plan assets
are not determined separately from FTX and amounts allocated to FCX under
this plan have not been material. As of December 31, 1993,
FTX's accumulated benefit obligation under the plan was fully funded.
PT-FI has a defined benefit plan covering substantially all
of its Indonesian national employees which is funded through cash
payments to retirees at the date of retirement. Benefits are based
on years of service and level of compensation. It is anticipated that
in order to comply with new Indonesian pension laws, certain amendments
to the plan will be made in 1994 which will affect future benefits
provided and funding requirements. These amendments are not expected
to have a material effect on the financial statements. The actuarial
present value of the accumulated benefit obligation, determined by the
projected credit method, was fully accrued at December 31, 1993, and
amounted to $6.0 million. The projected benefit obligation at
December 31, 1993, was $11.9 million assuming a discount rate
of 11 percent and an annual increase in future compensation
levels of 9 percent. The pension expense for each of the three
years in the period ended December 31, 1993, was not material.
RTM has a contractual obligation to supplement the amounts paid
to retired employees. Based on an assumed discount rate of 8 percent,
the liability accrued for such payments totaled $79.4 million at
December 31, 1993 ($76.6 million for retirees and $2.8 million
for current employees). Since the initial acquisition, RTM has
recorded expense of $5.2 million compared with cash payments of
$8.0 million. This obligation is unfunded.
Other Postretirement Benefits. FTX provides certain health care
and life insurance benefits for retired employees, including
employees seconded to FCX. Effective January 1,
1991, FCX adopted Statement of Financial Accounting Standards
No. 106 (FAS 106) requiring current accrual for postretirement
benefits other than pensions, recording an $11.4 million charge
as the cumulative effect of the accounting change. The FAS 106 expense
totaled $1.1 million in 1993 ($.2 million for service cost and
$.9 million in interest for prior period services), $1.3 million in 1992
($.3 million for service cost and $1.0 million in interest for
prior period services), and $1.3 million in 1991 ($.4 million for
service cost and $.9 million in interest for prior period services).
Summary information of the plan is as follows:
December 31,
______________
1993 1992
____ ____
(In Thousands)
Actuarial present value of accumulated
postretirement obligation:
Retirees................................................. $ 9,953 $ 8,604
Fully eligible active plan participants.................. 1,312 2,077
Other active plan participants........................... 1,747 1,981
_______ _______
Total accumulated postretirement obligation................ 13,012 12,662
Unrecognized net loss...................................... (668) (575)
_______ _______
Accrued postretirement benefit cost........................ $12,344 $12,087
======= =======
In determining the FAS 106 amounts, FTX used an initial health
care cost trend rate of 11.5 percent for 1993 (12 percent for 1992),
decreasing 1/2 percent per year until reaching 6 percent. A 1 percent
increase in the trend rate would increase the FAS 106 amounts by
approximately 10 percent. The discount rate used was 7 percent in
1993 and 8.5 percent in 1992. FCX anticipates funding these costs,
in addition to the annual cash costs, over the expected life of its
mineral reserves. FTX has the right to modify or terminate these benefits.
10. COMMITMENTS AND CONTINGENCIES
Environmental. PT-FI believes it is in compliance with all
applicable Indonesian environmental laws, rules, and regulations.
Based on current Indonesian environmental regulations, eventual
mine closure and reclamation costs, at the mine in Irian Jaya, is
not expected to be material.
RTM's capital expenditures for 1994 are expected to include
approximately $18 million to modify its sulphuric acid plants,
including expanding their capacity, to comply with certain
environmental standards in Spain. Additionally, at December 31,
1993 the Company had an accrual of $10.3 million related to RTM's
impending mine closure and the eventual closure of its smelter.
Long-Term Contracts and Operating Leases. At December 31, 1993, RTM
had purchase commitments totaling $25.6 million related to the
expansion of its smelter. In addition, it had commitments to
purchase concentrate from third parties (excluding PT-FI) of 305,000
metric tons in 1994, 295,000 metric tons in 1995, 260,000 metric
tons in 1996, 140,000 metric tons in 1997, and a total of 580,000
metric tons from 1998-2002, at then market prices.
FCX's minimum annual contractual charges under noncancellable
long-term contracts and operating leases which expire during the
period 1994 to 2000, totals $35.4 million, with $11.8 million in 1994,
$8.3 million in 1995, $6.1 million in 1996, $4.2 million in 1997,
and $3.8 million in 1998. Total rental expense under long-term contracts
and operating leases amounted to $15.4 million, $3.9 million, and
$3.3 million in 1993, 1992, and 1991, respectively.
Infrastructure Assets Sales. During 1993, the Company 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
$270.0 million. The acquired assets will be made available
to PT-FI and its employees and designees under arrangements
which will provide the ALatieF Joint Venture with a
guaranteed minimum rate of return on its investment.
Funding of the ALatieF Joint Venture is expected to be
provided by $90.0 million in equity contributions from the ALatieF Joint
Venture partners and $180.0 million in debt financing,
which is expected to be guaranteed by PT-FI, FCX or both.
The sale of the first group of assets to the ALatieF Joint Venture
was completed in December 1993 for a price of $90.0 million.
The sale was partially financed with a $60.0 million medium
term loan facility which is guaranteed by PT-FI (Note
7). The variable rate loan has a 5 percent per year amortization
with a balloon payment after five years. The ALatieF Joint
Venture is consolidated and no gain or loss was
recorded on the sale. The sales which are anticipated for
1994 and later are subject to the execution of definitive
agreements and certain Government approvals.
In December 1993, PT-FI announced the execution of a
Letter of Intent with Duke Energy Corp. (Duke Energy), a wholly
owned affiliate of Duke Power Company, and PowerLink
Corporation (PowerLink), a subsidiary of Northstar Energy
Corporation, pursuant to which PT-FI would sell its existing
and to-be-constructed power generation and transmission
assets and certain other power-related assets to a joint
venture (the Power Joint Venture) whose ownership consists
of Duke Energy (30 percent), PowerLink (30 percent), PT-FI (30
percent), and an Indonesian investor (10 percent). The total
value of the transaction is estimated at $200 million and
is expected to be concluded in two phases. The first sale,
representing the existing assets, is expected to exceed
$100 million and to occur in mid-1994. The final sale,
representing the to-be-constructed expansion-related assets, is
expected to occur during the first half of 1995. Under
the agreement, the Power Joint Venture will own these assets
and be responsible for providing the electrical power
services required by PT-FI at its mining, milling, and
support operations in Irian Jaya, Indonesia, including
the power services required for the expansion of ore throughput to
115,000 metric tons of ore milled per day. The transaction
is subject to the execution of definitive agreements between
PT-FI and the Power Joint Venture, financing, and certain
Government approvals.
PT-FI is proceeding with plans to sell other non-operating
assets under terms whereby the purchaser will operate the assets
and provide services to PT-FI and its employees and designees.
11. MINERAL RESERVES (Unaudited)
The Company's estimated proved and probable mineral reserves were as follows:
<TABLE>
<CAPTION>
Average Ore Grade Per Ton Recoverable Content*
_________________________________________________________ ______________________________
Year-End Ore Copper Gold Silver Copper Gold Silver
________ ___ ______ ____ ______ ______ ____ ______
(Metric Tons) (%) (Grams) (Ounce) (Grams) (Ounce) (Billions (Millions (Millions
of Lbs.) of Ozs.) of Ozs.)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PT-FI
1989 256,400,000 1.64 1.24 .040 5.23 .168 8.3 8.1 27.2
1990 445,741,000 1.59 1.71 .055 4.60 .148 13.9 19.5 34.7
1991 768,045,000 1.45 1.66 .053 3.86 .124 21.8 32.4 50.0
1992 733,173,000 1.47 1.72 .055 3.87 .124 20.9 32.1 44.7
1993 1,074,100,000 1.31 1.47 .047 4.04 .130 26.8 39.1 76.7
RTM
1993 12,700,000 - 1.03 .033 50.45 1.622 - 0.4 8.5
<FN>
* Recoverable production and reserves are used synonymously with payable
production and reserves.
</TABLE>
12. SUMMARIZED QUARTERLY FINANCIAL INFORMATION (Unaudited)
Net Income (Loss)
Operating Applicable to Net Income (Loss)
Revenues Income (Loss) Common Stock Per Share
________ _____________ _____________ ________________
(In Thousands, Except Per Share Amounts)
1993
____
1st Quarter a,b,c... $133,515 $ 25,454 $(5,160) $(.03)
2nd Quarter a,c..... 215,033 (18,463) (21,524) (.11)
3rd Quarter a....... 261,504 59,462 19,188 .10
4th Quarter......... 315,880 88,483 29,358 .15
________ ________ ________
$925,932 $154,936 $21,862 .11
======== ======== ========
1992
____
1st Quarter......... $106,749 $ 35,212 $ 17,312 $.10
2nd Quarter......... 241,684 109,261 49,716 .27
3rd Quarter......... 157,114 58,658 23,379 .12
4th Quarter......... 208,768 73,298 32,461 .17
________ ________ ________
$714,315 $276,429 $122,868 .66
======== ======== ========
a. The quarterly results have been restated to reflect the cumulative
effect of the changes in accounting principle (Note 1) and the RTM
investment on a fully consolidated basis. FCX previously reported this
investment using the equity method of accounting because FCX anticipated
reducing its interest below 50 percent within one year of the initial
investment in RTM. FCX is now considering alternative forms of financing.
b. Includes a $9.9 million charge ($.05 per share), net of taxes and
minority interest, for the cumulative effect of the changes in accounting
principle (Note 1).
c. Includes restructuring charges of $3.4 million ($1.9 million to net
income or $.01 per share) and $17.4 million ($9.6 million to net income or
$.05 per share) during the first and second quarters, respectively. The
second quarter includes nonrecurring charges totaling $16.3 million ($9.0
million to net income or $.05 per share).
FREEPORT-McMoRan COPPER & GOLD INC.
SELECTED FINANCIAL AND OPERATING DATA
Years Ended December 31,
--------------------------------------------------------
1993a 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------
(Financial data In Thousands, Except Per Share Amounts)
FINANCIAL
Revenues ......... $ 925,932 $ 714,315 $ 467,522 $ 434,148 $ 367,886
Operating income.. 154,936b 276,429 177,720 204,549 203,234
Net income........ 21,862c 122,868 96,159d 90,179 98,927
Net income per
common share..... .11c .66 .53d .52 .58
Dividends paid per
common share..... .60 .60 .55 .69 .56
Average common
shares outstanding 197,929 187,343 182,130 173,432 170,760
At December 31:
Property, plant..
and equipment,
net............. 1,646,603 993,412 601,675 502,171 264,688
Total assets..... 2,116,653 1,694,005 1,157,615 676,727 415,072
Long-term debt,
including
current portion
and short-term
borrowings..... 260,659 723,583 631,961 294,000 130,000
Minority interest 46,781 21,449 14,237 8,899 19,632
Gold denominated
preferred stock. 232,620 - - - -
Stockholders'
equity.......... 947,927 646,457 172,545 176,557 113,759
Common share
price........... 25.00 21.88 16.44 8.00 5.38
---------- ---------- ---------- ---------- ---------
PT-FI OPERATING
Ore milled
Metric tons...... 22,743,000 21,070,000 13,956,000 11,569,000 9,009,000
Metric tons
per day......... 62,300 57,600 38,200 31,700 24,700
Copper grade (%)... 1.57 1.59 1.77 1.61 1.84
Gold grade
Grams per
metric ton...... 1.46 1.35 1.23 .98 .60
Ounce per metric
ton............. .047 .043 .040 .032 .019
Silver grade
Grams per metric
ton............ 4.02 4.79 5.90 6.96 10.30
Ounce per metric
ton............ .129 .154 .190 .224 .331
Recovery rate (%)
Copper........... 87.0 88.2 89.9 90.1 91.0
Gold ............ 76.2 73.7 79.6 79.8 84.0
Silver 67.2 65.5 75.4 73.4 73.0
Copper (thousands
of recoverable
pounds)e
Production....... 658,400 619,100 466,700 361,800 317,400
Sales............ 645,700 651,800 439,700 348,000 317,800
Average
realization
per pound........ $.90 $1.03 $1.01 $1.20 $1.24
Gold (recoverable
ounces)
Production........ 786,700 641,000 420,800 284,000 139,000
Sales............. 762,900 679,300 397,900 273,000 140,000
Average
realization
per ounce........ $361.74 $340.11 $358.76 $378.30 $383.28
Silver (recoverable
ounces)
Production........ 1,541,200 1,642,500 1,567,900 1,749,000 1,971,000
Sales............. 1,480,900 1,804,400 1,620,900 1,664,000 1,979,000
Average
realization
per ounce........ $4.15 $3.72 $3.87 $4.61 $5.39
RTM OPERATING
(since acquisition)
Smelter operations
(metric tons):
Concentrate
treated.......... 330,200
Anode production.. 135,800
Cathode production 103,100
Gold operations:
Ore milled (metric
tons per day).... 17,900
Grade
Grams per metric
ton............ 1.05
Ounce per metric
ton............ .034
Production
(recoverable
ounces)......... 132,500
Average
realization
per ounce....... $369.06
a. Includes the operating results of Rio Tinto Minera, S.A. since
acquisition in March 1993.
b. Includes charges totaling $37.1 million ($14.7 million noncash) related
to restructuring the administrative organization at Freeport-McMoRan Inc.,
the parent company of FCX, and adjustments to general and administrative
expenses and site production and delivery costs as discussed further in
Management's Discussion and Analysis.
c. Includes the items discussed in Note B ($20.5 million after taxes and
minority interest; $.10 per share) and a noncash charge of $9.9 million
($.05 per share) related to the changes in accounting principle as
discussed in Note 1 to the financial statements.
d. Reflects a noncash charge of $5.8 million ($.03 per share) for the
cumulative effect of the change in accounting for postretirement benefits
other than pensions and a $26.5 million ($.15 per share) reduction in the
tax provision due to the signing of a new contract of work in December
1991.
e. Recoverable production and reserves are used synonymously with payable
production and reserves.
FREEPORT-McMoRan COPPER & GOLD INC.
REPORT OF MANAGEMENT
Freeport-McMoRan Copper & Gold Inc. (the Company) is responsible for the
preparation of the financial statements and all other information contained
in this Annual Report. The financial statements have been prepared in
conformity with generally accepted accounting principles and include
amounts that are based on management's informed judgments and estimates.
The Company maintains a system of internal accounting controls
designed to provide reasonable assurance at reasonable costs that assets
are safeguarded against loss or unauthorized use, and that transactions are
executed in accordance with management's authorization and recorded and
summarized properly. The system is tested and evaluated on a regular basis
by the Company's internal auditors. In accordance with generally accepted
auditing standards, the Company's independent public accountants have
developed an overall understanding of our accounting and financial controls
and have conducted other tests as they consider necessary to support their
opinion on the financial statements.
The Board of Directors, through its Audit Committee composed solely of
non-employee directors, is responsible for overseeing the integrity and
reliability of the Company's accounting and financial reporting practices
and the effectiveness of its system of internal controls. The independent
public accountants and internal auditors meet regularly with, and have
access to, this committee, with and without management present, to discuss
the results of their audit work.
George A. Mealey Stephen M. Jones
President and Vice President and
Chief Executive Officer Chief Financial Officer
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE STOCKHOLDERS AND BOARD OF DIRECTORS OF FREEPORT-McMoRan COPPER &
GOLD INC.: We have audited the accompanying balance sheets of Freeport-
McMoRan Copper & Gold Inc. (the Company), a Delaware Corporation, as of
December 31, 1993 and 1992, and the related statements of income, cash flow
and stockholders' equity for each of the three years in the period ended
December 31, 1993. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company as
of December 31, 1993 and 1992 and the results of its operations and its
cash flow for each of the three years in the period ended December 31, 1993
in conformity with generally accepted accounting principles.
As discussed in Notes 9 and 1 to the financial statements, effective
January 1, 1991, the Company changed its method of accounting for
postretirement benefits other than pensions and effective January 1, 1993,
changed its method of accounting for periodic scheduled maintenance costs,
deferred charges, and costs of management information systems.
New Orleans, Louisiana, /s/ Arthur Andersen & Co.
January 25, 1994
FCX CLASS A COMMON SHARES
Our Class A common shares trade on the New York Stock Exchange (NYSE) and
on the Australian Stock Exchange under the symbol "FCX". The FCX share
price is reported daily in the financial press under "FMCG" in most
listings of NYSE securities. At year-end 1993 the number of
holders of record of our Class A common shares was 2,619.
U.S. composite tape Class A common share price ranges during 1993 and 1992:
1993 1992
HIGH LOW HIGH LOW
FIRST QUARTER $26.13 $19.63 $22.38 $16.38
SECOND QUARTER 27.38 22.38 22.94 21.13
THIRD QUARTER 26.25 17.63 23.50 19.75
FOURTH QUARTER 25.88 17.50 22.00 19.00
CLASS A COMMON SHARE DIVIDENDS
FCX has a policy of distributing to its shareholders all dividends the
company receives as the majority shareholder in PT-FI, less tax obligations,
certain administrative costs, investment opportunities, and debt repayment.
PT-FI also has a policy of maximizing its dividend payments after
considering its operational, developmental, and exploratory needs as well
as debt repayment. Cash dividends declared and paid for the quarterly
periods of 1993 and 1992 were:
1993
AMOUNT RECORD PAYMENT
PER SHARE DATE DATE
FIRST QUARTER $.15 APR. 15, 1993 MAY 1, 1993
SECOND QUARTER .15 JUL. 15, 1993 AUG. 1, 1993
THIRD QUARTER .15 OCT. 15, 1993 NOV. 1, 1993
FOURTH QUARTER .15 JAN. 14, 1994 FEB. 1, 1994
1992
AMOUNT RECORD PAYMENT
PER SHARE DATE DATE
FIRST QUARTER $.15 APR. 15, 1992 MAY 1, 1992
SECOND QUARTER .15 JUL. 15, 1992 AUG. 1, 1992
THIRD QUARTER .15 OCT. 15, 1992 NOV. 1, 1992
FOURTH QUARTER .15 JAN. 15, 1993 FEB. 1, 1993
Exhibit 18.1
March 25, 1994
Freeport-McMoRan Copper & Gold Inc.
1615 Poydras Street
New Orleans, LA 70112
RE: Form 10-K Report for the year ended December 31, 1993
-----------------------------------------------------
This letter is written to meet the requirements of Regulation S-K calling
for a letter from a registrant's independent accountants whenever there has
been a change in accounting principle or practice.
We have been informed that, as of January 1, 1993, Freeport-McMoRan Copper
& Gold Inc. (FCX) changed its methods of accounting for the following
items:
1. Turnarounds - the accounting for maintenance turnarounds was changed
from the deferral method to the direct expense method. Previously, FCX
deferred costs related to periodic scheduled maintenance (turnarounds)
when incurred and amortized them on a straight-line basis, generally
over six months to two years until the next scheduled turnaround.
According to the management of FCX, this change was made to conform
FCX's policy with that which is followed by its parent, Freeport-
McMoRan Inc. (FTX). According to the management of FTX, which also
changed its policy for accounting for turnarounds, this change was made
to conform FTX's policy with that which is followed by IMC-Agrico
Company, a joint venture to which substantially all of FTX's phosphate
fertilizer production assets were contributed on July 1, 1993.
2. Deferred Charges - the accounting for deferred charges was changed to
provide for deferral of only those costs that directly relate to the
acquisition, construction and development of assets and to the issuance
of debt and related instruments. Previously, certain other costs which
benefitted future periods were deferred and amortized over the period
benefitted. According to FTX management, they believe this change
provides a better measure of operating results. In addition, the
administrative costs of accounting for assets will be reduced by not
deferring any relatively insignificant expenditures that do not have a
material effect on measuring periodic net income.
3. Management Information Systems (MIS) Costs - Costs of MIS equipment and
software that have a material impact on periodic measurement of net
income are capitalized and amortized over their estimated productive
lives. Other MIS costs, including equipment and purchased software
that involve relatively immaterial amounts (currently individual
expenditures of less than $500,000) and short estimated productive
lives (currently less than three years) are charged to expense when
incurred. Previously, most expenditures for MIS equipment and
purchased software were capitalized. The accounting for MIS costs was
changed to recognize the rapid rate of change in MIS, which results in
short productive lives of equipment and software and a need for
continuing investments. Generally within a two-to-three year period,
if such hardware has not been replaced, significant upgrades will have
been required. Within two years, maintenance costs on existing
equipment often equals or exceeds replacement cost. Software is
subject to constant modification to meet the needs of the changing
hardware environment, as well as the changing business environment.
Reasonable business judgement is required in determining appropriate
application of accounting principles, including judgement regarding the
cost and the materiality of the impact of accounting precision.
A complete coordinated set of financial and reporting standards for
determining the preferability of accounting principles among acceptable
alternative principles has not been established by the accounting
profession for the items referred to above. Thus, we cannot make an
objective determination of whether the changes in accounting described in
the preceding paragraph are to preferable methods. However, we have
reviewed the pertinent factors, including those related to financial
reporting, in these particular cases on a subjective basis, and our opinion
stated below is based on our determination made in this manner.
We are of the opinion that FCX's changes in methods of accounting are to
acceptable alternative methods of accounting, which, based upon the reasons
stated above for the respective changes (including the costs and benefits
of alternative principles and the related materiality of the application
thereof) and our discussions with you, are also preferable under the
circumstances in these particular cases. In arriving at this opinion, we
have relied on the business judgement and business planning of your
management.
Very truly yours,
/s/ Arthur Andersen & Co.
------------------------
Arthur Andersen & Co.
Exhibit 21.1
List of Subsidiaries of
FREEPORT-McMoRan COPPER & GOLD INC.
Where Name Under Which
Entity Organized It Does Business
------ --------- ----------------
P.T. Freeport Indonesia Company Indonesia Same
and Delaware
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference of our reports included herein or incorporated
by reference in this Form 10-K, into Freeport-McMoRan Copper & Gold Inc.'s
previously filed Registration Statements on Forms S-3 (File No. 33-45787,
No. 33-63376, No. 33-66098 and No. 33-52257-01).
/s/ Arthur Andersen & Co.
New Orleans, Louisiana,
March 25, 1994
Exhibit 24.1
FREEPORT-McMoRan COPPER & GOLD INC.
Certificate of Secretary
I, Michael C. Kilanowski, Jr., Secretary of Freeport-McMoRan
Copper & Gold Inc. (the "Corporation"), a Delaware corporation,
do hereby certify that the following resolution was duly adopted
by the Board of Directors of the Corporation at a meeting held on
December 13, 1988, and that such resolution has not been amended,
modified or rescinded and is in full force and effect:
RESOLVED, That any report, registration statement
or other form filed on behalf of this corporation
pursuant to the Securities Exchange Act of 1934, or any
amendment to any such report, registration statement or
other form, may be signed on behalf of any director or
officer of this corporation pursuant to a power of
attorney executed by such director or officer.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal
of the Corporation this 29th day of March, 1994.
/s/ Michael C. Kilanowski, Jr.
------------------------------
(SEAL) Michael C. Kilanowski, Jr.
Secretary
Exhibit 24.2
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ C. Donald Whitmire
C. Donald Whitmire
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Stephen M. Jones
Stephen M. Jones
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Leland O. Erdahl
Leland O. Erdahl
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Ronald Grossman
Ronald Grossman
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Wolfgang F. Siegel
Wolfgang F. Siegel
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Elwin E. Smith
Elwin E. Smith
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT, RENE L. LATIOLAIS,
and GEORGE A. MEALEY, and each of them acting individually,
his true and lawful attorney-in-fact with power to act
without the others and with full power of substitution, to
execute, deliver and file, for and on behalf of him, in his
name and in his capacity or capacities as aforesaid, an
Annual Report of the Company on Form 10-K for the year
ended December 31, 1993 and any amendment or amendments
thereto and any other document in support thereof or
supplemental thereto, and the undersigned hereby grants to
said attorneys, and each of them, full power and authority
to do and perform each and every act and thing whatsoever
that said attorney or attorneys may deem necessary or
advisable to carry out fully the intent of the foregoing as
the undersigned might or could do personally or in the
capacity or capacities as aforesaid, hereby ratifying and
confirming all acts and things which said attorney or
attorneys may do or cause to be done by virtue of this
Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Eiji Umene
Eiji Umene
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT and GEORGE A.
MEALEY, and each of them acting individually, his true and
lawful attorney-in-fact with power to act without the
others and with full power of substitution, to execute,
deliver and file, for and on behalf of him, in his name and
in his capacity or capacities as aforesaid, an Annual
Report of the Company on Form 10-K for the year ended
December 31, 1993 and any amendment or amendments thereto
and any other document in support thereof or supplemental
thereto, and the undersigned hereby grants to said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing whatsoever that
said attorney or attorneys may deem necessary or advisable
to carry out fully the intent of the foregoing as the
undersigned might or could do personally or in the capacity
or capacities as aforesaid, hereby ratifying and confirming
all acts and things which said attorney or attorneys may do
or cause to be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ Rene L. Latiolais
----------------------
Rene L. Latiolais
POWER OF ATTORNEY
BE IT KNOWN: That the undersigned, in his
capacity or capacities as an officer and/or a member of the
Board of Directors of Freeport-McMoRan Copper & Gold Inc.,
a Delaware corporation (the "Company"), does hereby make,
constitute and appoint JAMES R. MOFFETT and RENE L.
LATIOLAIS, and each of them acting individually, his true
and lawful attorney-in-fact with power to act without the
others and with full power of substitution, to execute,
deliver and file, for and on behalf of him, in his name and
in his capacity or capacities as aforesaid, an Annual
Report of the Company on Form 10-K for the year ended
December 31, 1993 and any amendment or amendments thereto
and any other document in support thereof or supplemental
thereto, and the undersigned hereby grants to said
attorneys, and each of them, full power and authority to do
and perform each and every act and thing whatsoever that
said attorney or attorneys may deem necessary or advisable
to carry out fully the intent of the foregoing as the
undersigned might or could do personally or in the capacity
or capacities as aforesaid, hereby ratifying and confirming
all acts and things which said attorney or attorneys may do
or cause to be done by virtue of this Power of Attorney.
EXECUTED this 29th day of March, 1994.
/s/ George A. Mealey
--------------------
George A. Mealey
