-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, LE8xJpwVP2YE0Ens7J0cV9RGGX642lLv2w2iExAfTBCSkFwJXtKO3VdU/ds1a4v/ J7XtvWXwtZ58XwJM2uiULQ== 0000950103-95-000205.txt : 19950601 0000950103-95-000205.hdr.sgml : 19950601 ACCESSION NUMBER: 0000950103-95-000205 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19950531 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN INC CENTRAL INDEX KEY: 0000351116 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 133051048 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: 1934 Act SEC FILE NUMBER: 005-38039 FILM NUMBER: 95543712 BUSINESS ADDRESS: STREET 1: 1615 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045824000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FREEPORT MCMORAN INC CENTRAL INDEX KEY: 0000351116 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 133051048 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 1615 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045824000 SC 13E4 1 As filed with the Securities and Exchange Commission on May 31, 1995 ____________________________________________________________________________ ____________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________ SCHEDULE 13E-4 RULE 13E-4 TRANSACTION STATEMENT (PURSUANT TO SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934) FREEPORT-McMoRan Inc. (Name of Issuer) FREEPORT-McMoRan Inc. (Name of Person(s) Filing Statement) 6.55% Convertible Subordinated Notes due January 15, 2001 (Title of Class of Securities) 356714 AE 5 (CUSIP Number of Class of Securities) John G. Amato, Esq. General Counsel Freeport-McMoRan Inc. 1615 Poydras Street New Orleans, Louisiana 70112 (504) 582-4000 (Name, Address and Telephone Number of Persons Authorized to Receive Notice and Communications on Behalf of Person(s) Filing Statement) Copy to: E. Deane Leonard, Esq. David W. Ferguson, Esq. Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017 (212) 450-4000 ____________________ This statement is filed in connection with (check the appropriate box): a.[ ]The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14(C) or Rule 13e-3(c) under the Securities Exchange Act of 1934. b.[ ]The filing of a registration statement under the Securities Act of 1933. c.[X]A tender offer. d.[ ]None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [ ] Calculation of Filing Fee ____________________________________________________________________________ ____________________________________________________________________________ Transaction Valuation* Amount of Filing Fee ____________________________________________________________________________ $339,314,430 $67,863 ____________________________________________________________________________ [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount previously paid: N/A Filing party: N/A Form or registration No.: N/A Date filed: N/A ____________________________________________________________________________ ____________________________________________________________________________ *Calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, based on the 6.55% Convertible Subordinated Notes due January 15, 2001 of Freeport-McMoRan Inc. (the "Notes") to be exchanged, as follows: the product of $372,873,000 (the aggregate outstanding principal amount of the Notes) and 91% (the average of the high and low prices of the Notes, expressed as a decimal, as reported by the New York Stock Exchange on May 26, 1995). Item 1.Security and Issuer. (a) The name of the issuer is Freeport-McMoRan Inc., a Delaware corporation (the "Company"), which has its principal executive offices at 1615 Poydras Street, New Orleans, Louisiana 70112 (telephone number (504) 582-4000). (b) This schedule relates to the Company's call for redemption on June 30, 1995 of all of its 6.55% Convertible Subordinated Notes due January 15, 2001 (the "Notes") outstanding on that date pursuant to a Notice of Redemption dated May 31, 1995 (the "Notice of Redemption"), and related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. The information set forth under "Alternatives Available to Holders of the Notes", "Purpose of the Conversion Enhancement" and "Interests of Certain Persons in the Transaction" in the Notice of Redemption is incorporated herein by reference. (c) The Notes and the Common Stock are listed for trading on the New York Stock Exchange. The information set forth under "Price Range of the Notes" and "Price Range of the Common Stock" in the Notice of Redemption is incorporated herein by reference. (d) Not applicable. Item 2.Source and Amount of Funds or Other Consideration. (a) The information set forth under "Alternatives Available to Holders of the Notes" and "Purpose of the Conversion Enhancement" in the Notice of Redemption is incorporated herein by reference. (b) Not applicable. Item 3.Purpose of the Tender Offer and Plans or Proposals of the Issuer or Affiliate. (a)-(g) The information set forth under "The Company", "Sources of Financing for the Redemption", "Purpose of the Conversion Enhancement", "Background to the Distribution", "Strategic Alliance", "Dividends", "Description of the Common Stock", "Transactions and Agreements Concerning the Notes and the Common Stock" and "Capitalization" in the Notice of Redemption is incorporated herein by reference. (h) Following redemption of the Notes as described in the Notice of Redemption, the Notes will be delisted from the New York Stock Exchange. (i) Upon redemption of the Notes as described in the Notice of Redemption, the Notes will be eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended. (j) Not applicable. Item 4. Interest in Securities of the Issuer. The information set forth under "Transactions and Agreements Concerning the Notes and the Common Stock" in the Notice of Redemption is incorporated herein by reference. Item 5. Contracts, Arrangements, Understandings or Relationships With Respect to the Issuer's Securities. The information set forth under "Sources of Financing for the Redemption", "Purpose of the Conversion Enhancement", "Background to the Distribution", "Strategic Alliance", "Description of the Common Stock", "Interests of Certain Persons in the Transaction" and "Transactions and Agreements Concerning the Notes and the Common Stock" in the Notice of Redemption is incorporated herein by reference. Item 6. Persons Retained, Employed or to be Compensated. The information set forth under "Solicitation of Conversions; Fees" in the Notice of Redemption is incorporated herein by reference. Item 7.Financial Information. (a) The financial information set forth under "Summary Financial Information" in the Notice of Redemption and the financial statements of the Company and its consolidated subsidiaries (and the notes thereto) included in the Company's 1994 Annual Report to stockholders and in the Company's Quarterly Report on Form 10-Q for the calendar quarter ended March 31, 1995 are incorporated herein by reference. (b) The financial information set forth under "Summary Financial Information" in the Notice of Redemption is incorporated herein by reference. Item 8.Additional Information. (a)-(d) Not applicable. (e) Additional information is contained in the Notice of Redemption and Letter of Transmittal, which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, and incorporated herein by reference. Item 9.Material to be Filed as Exhibits. (a)(1) Notice of Redemption dated May 31, 1995. (a)(2) Form of Letter of Transmittal dated May 31, 1995. (a)(3) Letter from Freeport-McMoRan Inc. to holders of the 6.55% Convertible Subordinated Notes due January 15, 2001 dated May 31, 1995. (a)(4) Press Release dated May 31, 1995. (b) Not applicable. (c)(1) Agreement dated as of May 2, 1995 by and between the Company and Freeport-McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand. Incorporated by reference to Exhibit 2.1 to the Current Report of the Company on Form 8-K filed with the Securities and Exchange Commission (the "Commission") on May 26, 1995. (d) Not applicable. (e)(1) Prospectus Supplement dated as of January 29, 1991 to the Prospectus dated as of January 8, 1991 relating to $373,000,000 of the Company's 6.55% Convertible Subordinated Notes due January 15, 2001. Incorporated by reference to the Company's Registration Statement on Form S-3, File No. 33-37716, filed with the Commission on November 9, 1990. (f) Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 31, 1995 FREEPORT-McMoRan INC. /s/ Charles W. Goodyear ___________________________ By: Charles W. Goodyear Senior Vice President and EXHIBIT INDEX Sequentially Exhibit Numbered Number Description Page ______ ___________ ___________ 7(a)(1) Financial statements of the Company and its consolidated subsidiaries (and the notes thereto) set forth on pages 27-48, inclusive, of the Company's 1994 Annual Report to stockholders. Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1994........................................................... --- 7(a)(2) Financial statements of the Company and its consolidated subsidiaries (and the notes thereto) set forth in the Company's Quarterly Report on Form 10-Q for the calendar quarter ended March 31, 1995 (the "1995 First Quarter Form 10-Q"). Incorporated by reference to the 1995 First Quarter Form 10-Q........................................................... --- 9(a)(1) Notice of Redemption dated May 31, 1995........................ 9(a)(2)Form of Letter of Transmittal dated May 31, 1995................ 9(a)(3) Letter from Freeport-McMoRan Inc. to holders of the 6.55% Convertible Subordinated Notes due January 15, 2001 dated May 31, 1995............................................................ --- 9(a)(4) Press Release dated May 31, 1995................................. --- 9(c)(1) Agreement dated as of May 2, 1995 by and between the Company and Freeport-McMoRan Copper & Gold Inc., on the one hand, and The RTZ Corporation PLC, RTZ Indonesia Limited and RTZ America, Inc., on the other hand. Incorporated by reference to Exhibit 2.1 to the Current Report of the Company on Form 8-K filed with the Securities and Exchange Commission (the "Commission") on May 26, 1995............ --- 9(e)(1) Prospectus Supplement dated as of January 29, 1991 to the Prospectus dated as of January 8, 1991 relating to $373,000,000 of the Company's 6.55% Convertible Subordinated Notes due January 15, 2001. Incorporated by reference to the Company's Registration Statement on Form S-3, File No. 33-37716, filed with the Commission on November 9, 1990.............................................................. --- EX-99.9(A)(1) 2 Exhibit 9(a)(1) NOTICE OF REDEMPTION of 6.55% Convertible Subordinated Notes due January 15, 2001 of FREEPORT-McMoRan INC. CUSIP No. 356714 AE 5 Notice is hereby given that Freeport-McMoRan Inc. (the "Company") has called for redemption on June 30, 1995 (the "Redemption Date") all of its 6.55% Convertible Subordinated Notes due January 15, 2001 (the "Notes") outstanding on that date at a redemption price, including accrued and unpaid interest to and including the Redemption Date, of $942.16 for each $1,000 principal amount of Notes (the "Redemption Price"). Payment of the Redemption Price, upon presentation and surrender to the Paying Agent, Chemical Bank (the "Paying Agent"), of certificates evidencing the Notes, will be made during usual business hours at the following address: Delivery Address of Paying Agent: By Mail: By Courier: By Hand: Chemical Bank Chemical Bank Chemical Bank Debt Operations Department IDS Mail Services Room 234 -- North Building Church Street Station 450 West 33rd Street Corporate Trust Securities P.O. Box 1385 Bay 13 Window New York, NY 10008-1385 New York, NY 10001 55 Water Street New York, NY 10041 As an alternative to redemption, the Notes may be converted, until 5:00 p.m. (New York City time) on the Redemption Date and at the option of the holder, into shares of Common Stock, $1.00 par value, of the Company (the "Common Stock") at a conversion rate equal to 55.95 shares of Common Stock per each $1,000 principal amount of Notes. From and after the Redemption Date interest on the Notes shall cease to accrue and holders of the Notes shall have no right in respect thereof except the right to receive the Redemption Price thereof upon surrender of certificates representing the Notes, unless the Company shall not pay the Redemption Price on the Redemption Date. ALTERNATIVES AVAILABLE TO HOLDERS OF THE NOTES Holders of the Notes have the following alternatives: 1. Conversion of the Notes into Common Stock by 5:00 p.m. (New York City time) on June 30, 1995. The Notes may be converted at the option of the holder thereof at any time up to, but not later than, 5:00 p.m. (New York City time) on the Redemption Date into fully paid and nonassessable shares of Common Stock at a conversion rate equal to 55.95 shares of Common Stock per each $1,000 principal amount of Notes (the "Conversion Rate"). The Conversion Rate reflects an enhancement made by the Company to the rate otherwise applicable to the Notes to make conversion more financially attractive to the holders thereof, as more fully described below. See "Purpose of the Conversion Enhancement". Any Notes remaining outstanding at 5:00 p.m. (New York City time) on the Redemption Date will automatically be redeemed as set forth above. Notes may be surrendered for conversion during usual business hours to the Paying Agent at the address set forth above, together with a written notice of election to convert such Notes. Completion, execution and return of the enclosed Letter of Transmittal, marked clearly to indicate a preference for Alternative 1 listed thereon, and the Conversion Notice on the reverse of the certificate for the Notes surrendered for conversion, will constitute compliance with such notice requirements. Since it is the time of receipt, not the time of mailing, that determines whether the Notes have been properly tendered for conversion, sufficient time should be allowed for delivery. No adjustment in respect of dividends on the Common Stock will be made upon conversion of the Notes. No fractional shares or scrip representing fractional shares of Common Stock are issuable upon conversion. In lieu of any fractional shares, the Company will pay holders of Notes surrendered for conversion an equivalent amount of cash, determined as provided in the Subordinated Indenture dated as of November 9, 1990 between the Company and Chemical Bank, as Trustee (the "Subordinated Indenture"). Although no assurance can be given as to the future market value of the Common Stock, so long as the market price of the Common Stock is more than $16.84 per share, holders of the Notes will receive upon conversion thereof shares of Common Stock, and cash in lieu of fractional shares, having a greater current market value than the amount of cash that they would otherwise receive upon redemption. On May 30, 1995 the closing price of the Common Stock as reported by the New York Stock Exchange ("NYSE") was $17.75 per share. Holders of the Notes are urged to obtain current market prices prior to converting their Notes or surrendering their Notes for redemption. 2. Redemption of the Notes at $942.16 per each $1,000 Principal Amount of Notes. Payment of the Redemption Price will be made by the Paying Agent on and after the Redemption Date upon receipt of the certificates for the Notes so redeemed. From and after the Redemption Date, unless the Company has not paid the Redemption Price on the Redemption Date, interest on the Notes shall cease to accrue and holders of the Notes shall have no right in respect thereof except the right to receive the Redemption Price thereof upon surrender of their certificates representing the Notes. Notes surrendered for redemption must be delivered to the Paying Agent at the address set forth above, together with the enclosed Letter of Transmittal, marked clearly to indicate a preference for Alternative 2 listed thereon. 3. Conversion of a Portion of Notes into Common Stock by 5:00 p.m. (New York City time) on June 30, 1995 and Redemption of a Portion of Notes at $942.16 per each $1,000 Principal Amount of Notes. Holders of Notes may convert a portion of the principal amount of their Notes if such portion is $1,000 or an integral multiple of $1,000 at any time up to, but not later than, 5:00 p.m. (New York City time) on the Redemption Date into fully paid and nonassessable shares of Common Stock of the Company at the Conversion Rate (as defined in Alternative 1 described above). From and after the Redemption Date, unless the Company has not paid the Redemption Price on the Redemption Date, interest on the portion of the Notes not converted shall cease to accrue and holders thereof shall have no right in respect thereof except the right to receive the Redemption Price thereof upon surrender of their certificates representing such portion of the Notes. Notes may be surrendered for conversion or redemption during usual business hours to the Paying Agent at the address set forth above. Notes surrendered for conversion must be accompanied by a written notice of election to convert such portion of Notes. Completion, execution and return of the enclosed Letter of Transmittal, marked clearly to indicate a preference for Alternative 3 listed thereon, and the Conversion Notice on the reverse of the certificate for the Notes surrendered for conversion, will constitute compliance with such notice requirements. Since it is the time of receipt, not the time of mailing, that determines whether the Notes have been properly tendered for conversion, sufficient time should be allowed for delivery. Please note that "Box D -- Allocation of Principal Amount" in the Letter of Transmittal must also be completed. No adjustment in respect of dividends on the Common Stock will be made upon conversion of the Notes. No fractional shares or scrip representing fractional shares of Common Stock are issuable upon conversion. In lieu of any fractional shares, the Company will pay holders of Notes surrendered for conversion an equivalent amount of cash, determined as provided in the Subordinated Indenture. 4. Sale of Notes Through Brokerage Transactions. Notes may be sold through a broker on the NYSE or otherwise in the open market. Any such sale should be made sufficiently in advance of 5:00 p.m. (New York City time) on the Redemption Date to permit the buyer of such Notes to exercise the conversion privilege. After 5:00 p.m. (New York City time) on the Redemption Date, holders of the Notes will not be entitled to convert their Notes into Common Stock, and after that date the market value of the Notes will reflect only the right to receive the Redemption Price and will not reflect the market value of the Common Stock. ADDITIONAL INFORMATION TO CONSIDER The Company The Company is a leading and diversified natural resource company currently engaged in the exploration for and mining, production and/or processing of copper, gold, silver, sulphur, phosphate rock, phosphate-based fertilizers, uranium, oil and other natural resources. The Company engages in such activities primarily through Freeport-McMoRan Copper & Gold Inc. ("FCX") and Freeport-McMoRan Resource Partners, Limited Partnership ("FRP"). 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. In 1993 FCX acquired the Spanish company Rio Tinto Minera, S.A. ("RTM"), which is principally engaged in the smelting and refining of copper concentrates in Spain through wholly owned subsidiaries. Eastern Mining Company, Inc. ("Eastern Mining") is a wholly owned subsidiary of FCX. FRP, a Delaware limited partnership, participates in one of the largest and lowest cost phosphate fertilizer producers in the world through its joint venture interest in IMC-Agrico Company, a Delaware general partnership ("IMC-Agrico"). IMC-Agrico's business includes the mining and sale of phosphate rock, the production, distribution and sale of phosphate fertilizers, and the extraction of uranium oxide from phosphoric acid. FRP's business also includes exploration for and mining, transportation and sale of sulphur, and the production of oil reserves at Main Pass Block 299 ("Main Pass"), offshore Louisiana in the Gulf of Mexico. Source of Financing for the Redemption The amount of funds required for the redemption of the Notes will depend upon the number of Notes which are surrendered for conversion prior to the Redemption Date. If no Notes are so surrendered, the Company will finance redemption of the Notes primarily through the sale, pursuant to the Purchase Agreement described below under "Strategic Alliance" (the "Purchase Agreement"), to RTZ Indonesia Limited ("RTZI"), an indirect wholly owned subsidiary of The RTZ Corporation PLC ("RTZ"), of shares of FCX Class A Common Stock at a purchase price of $20.90 per share, up to a maximum of 16.8 million shares. The remainder of such redemption price, if any, would be obtained from borrowing under the Company's existing Credit Agreements. It was to avoid such financing that the Conversion Rate was enhanced as described under "Purpose of the Conversion Enhancement". The Purchase Agreement provided that if requested to do so by the Company, RTZ America, Inc. ("RTZA"), a Delaware corporation and an indirect wholly owned subsidiary of RTZ, would make a tender offer for the Notes. For various reasons, including primarily the expectation that the use of a tender offer would delay the Distribution (as defined below), the Company has elected not to make such a request. Although not obligated to do so, RTZA may, from time to time prior to the Redemption Date, purchase Notes in the market. Purpose of the Conversion Enhancement As of May 30, 1995 the aggregate principal amount of Notes outstanding was $372,873,000. The Notes were issued under the Subordinated Indenture. Pursuant to a Supplemental Indenture dated as of May 31, 1995 to the Subordinated Indenture, the Company increased the conversion rate to 55.95 shares of Common Stock per each $1,000 principal amount of Notes (the "Conversion Rate"), equivalent to a decrease in the conversion price from $20.31 to $17.87 in principal amount of each Note per share of Common Stock (the "Conversion Enhancement"). Although no assurance can be given as to the future market value of the Common Stock, so long as the market price of the Common Stock is more than $16.84 per share, holders of the Notes will receive upon conversion thereof shares of Common Stock, and cash in lieu of fractional shares, having a greater current market value than the amount of cash that they would otherwise receive upon redemption. Although under the Subordinated Indenture no payment or adjustment is required for interest accrued on any Note converted, the Conversion Rate as modified reflects, among other things, an adjustment for the interest accrued up to and including the Redemption Date. The Company's basic reason for making the Conversion Enhancement relates to the Company's previously announced intention to effect the tax-free distribution to its Common Stockholders, on a pro rata basis, of all of the Class B Common Stock of FCX which the Company owns at the time of the distribution (the "Distribution"). See "Background to the Distribution" below. By converting the Notes into Common Stock prior to the Redemption Date, the holders thereof will be able to participate fully in the Distribution. Although the Company is not making any recommendations to the holders of the Notes as to whether or not they should convert their Notes prior to the Redemption Date, the Company believes that it is desirable to afford holders of the Notes a meaningful opportunity to participate in the Distribution should they desire to do so. The holders of the Notes currently have the ability to become holders of Common Stock by exercise of their right to convert the Notes into Common Stock in accordance with the conversion features of the Notes, and thus participate in the Distribution. The Company has made the Conversion Enhancement to encourage such conversions. Following the Distribution, the Company will have no continuing interest in the copper, gold and silver business conducted by FCX, and the only material portion of its current business which will continue will be its interest in FRP and in the sulphur and agricultural minerals businesses conducted by FRP. However, holders of Notes who convert such Notes into Common Stock prior to the Redemption Date and hold the Common Stock on the record date of the Distribution will have the opportunity to continue to participate in the businesses carried on by FCX as well as by the Company. The Company believes that the Conversion Enhancement is also advantageous to the Company. After the Distribution, the remaining assets of the Company will be significantly reduced, and, as a result, the Company needs to reduce its ongoing fixed charges. This goal will be furthered to the extent the Conversion Enhancement promotes conversions of Notes into Common Stock so that the amount of cash necessary to effect the redemption of the Notes is reduced. Background to the Distribution In May 1994, the Company announced that it was taking steps to effect the tax-free Distribution to its stockholders, on a pro rata basis, of all of the Class B Common Stock of FCX which it owns at the time of such Distribution. The Distribution, which is expected to take place by midyear, is contingent on a number of factors including (1) assurance that the Distribution will be tax-free, (2) completion of the restructuring (the "Company Restructuring") of the liabilities of the Company including its long-term debt, which is in the process of being completed, and (3) changing the voting rights of the FCX common stock and preferred stock so that the Class B stockholders of FCX elect 80% of the FCX directors and the Class A stockholders and preferred stockholders of FCX elect the balance, which change has been approved by the FCX stockholders. The redemption or conversion of all of the Notes is a necessary part of the Company Restructuring. The proposed Distribution results from significant changes in the businesses of the Company and FCX over the past seven years. These changes were brought about by two world-class mineral discoveries in 1988 and management's decision to concentrate on the development and growth of these properties. The Company has been active through subsidiaries in exploring for copper, gold and other minerals in Indonesia since 1967. FCX was organized in 1987 to hold the Company's Indonesian property interests and first sold a minority stock interest to the public in May 1988. At the time of the offering, the common equity market value of FCX was less than one-quarter that of the Company. Just seven years later, the common equity market value of FCX has grown almost eleven-fold so that its common equity market value is now almost double that of the Company. The Company believes that FCX is one of only a few publicly-traded subsidiaries whose common equity market value exceeds that of its publicly-traded parent corporation. Because of FCX's ongoing capital needs and the potential for future conflicts between the capital needs and priorities of FCX and the Company, the Company believes that, absent the Distribution, its continued majority control of FCX could increase FCX's cost of capital and could impede FCX's ability to raise capital, to continue growth and to develop its business opportunities. The arrangements with RTZ described below have been entered into in anticipation of the Distribution. The significant growth in the common equity market value of FCX is due in large part to the discovery in 1988 by PT-FI of the Grasberg mineral deposit in Irian Jaya, Indonesia. This deposit contains the world's largest proved gold reserve and the world's third largest copper reserve. Since the discovery, FCX has undertaken a substantial capital expenditure program to develop the Grasberg property. To date, it has invested over two billion dollars in its Indonesian operations. Over the same period, the Company has evolved primarily into a holding company with two principal interests -- the stock in FCX and a 51.4% partnership interest in FRP. FRP made a major sulphur discovery in the Gulf of Mexico in 1988 and invested nearly $600 million in developing the Main Pass sulphur and related oil and gas facilities, which were completed in 1992. In 1993, FRP transferred its other principal business -- the phosphate fertilizer business -- to IMC-Agrico, a newly formed partnership with a subsidiary of IMC Global Inc., in order to achieve substantial operating and administrative savings. The Company has sold or otherwise disposed of its other business assets to concentrate on the development of these two properties. In May 1992, the Company transferred to FM Properties Operating Co., a Delaware general partnership owned by FM Properties Inc. ("FMPO"), substantially all of the domestic oil and gas properties of, and substantially all of the domestic real estate then held for development by, the Company and certain of its subsidiaries, excluding FRP, and then distributed all shares of FMPO to the holders of the Company's Common Stock. Similarly, in 1994, the Company transferred substantially all of its remaining oil and gas interests, including its oil and gas exploration business, excluding those owned by FRP, to McMoRan Oil & Gas Co., the stock of which was then distributed to the holders of the Company's Common Stock. FCX's development and growth are continuing at a rapid pace. A contract of work signed by PT-FI and the Government of the Republic of Indonesia (the "Government") on December 30, 1991 (the "COW") covers both PT-FI's original 24,700 acre mining area ("Block A") and an additional 4.875 million acre exploration area ("Block B", and, together with Block A, the "COW Area"). In August 1994, a subsidiary of Eastern Mining, P.T. Irja Eastern Minerals Corporation ("P.T. Irja"), entered into a separate contract of work (the "Eastern Mining COW") with the Government relating to 2.5 million acres adjacent to the COW Area (the "Eastern Mining COW Area"). PT-FI has recently completed expanding its production capacity from 66,000 metric tons of ore per day ("MTPD") to 115,000 MTPD. With this expansion project annual production is expected to be approximately 1.1 billion pounds of copper and 1.5 million ounces of gold, as compared to the 1994 levels of 710 million pounds of copper and 784 thousand ounces of gold, respectively. FCX's copper, gold and silver reserves have grown substantially both through continued delineation of the Grasberg deposit and other existing mineral deposits and as a result of FCX's active exploration program. FCX's exploration activities are being pursued both within Block A and within Block B and the adjacent Eastern Mining COW Area. Preliminary exploration within the exploration areas has indicated a number of promising targets, although no assurance can be given that any of these targets contains commercially exploitable mineral deposits. The COW and the Eastern Mining COW contain provisions under which PT-FI and P.T. Irja must progressively relinquish a portion of their rights to their respective contract of work area. PT-FI has relinquished its rights to approximately 1.7 million acres and is required to relinquish an additional approximately 3.2 million acres over the next four years. Similarly, 75% of the Eastern Mining COW Area must be relinquished over the next two to seven years. In light of the relinquishment provisions, each company has expanded its exploration program with a focus on what it believes to be the most promising exploration opportunities in its respective contract of work area. Although FCX expects to require continued access to other financing sources, including bank credit facilities and the public and private securities markets, the arrangements with RTZ described below will provide a significant portion of the capital expenditures which FCX anticipates will be required to expand its milling and production capacity in line with future reserve additions and continue its exploration activities. See "Strategic Alliance". Estimated capital expenditures will be determined by the result of FCX's exploration activities and ongoing capital maintenance programs. Estimated aggregate capital expenditures for 1995 are expected to approximate $650 million for the expansion to 115,000 MTPD of PT-FI's production capacity, ongoing capital maintenance expenditures and the expansion to 270,000 tons of metal per year of a smelter in Huelva, Spain currently owned by RTM. In addition, in January 1995 FCX announced proposed agreements with Mitsubishi Materials Corporation and Fluor Daniel Wright Ltd. to form an Indonesian foreign investment company to jointly build, own and operate a smelter/refinery in Gresik, Indonesia to process approximately 200,000 tons of copper per year. Pursuant to the proposed agreements, which remain subject to various conditions, FCX will own 20% of the newly formed Indonesian company, and PT-FI will provide all of the smelter's copper concentrate feedstock requirement, estimated to be approximately 600,000 tons annually. The Distribution was designed to enable FCX to meet its substantial capital needs at a lower cost than any possible alternative. The transaction was also intended to provide FCX with the flexibility to meet future growth and new opportunities through the use of equity financing or by attracting a joint venture partner for one or more projects. The proposed arrangements with RTZ represent the type of projects that had been contemplated. The Distribution will permit the managements of FCX and the Company to make business decisions without being influenced by the competing financial needs of the other business. In addition, the separation of FCX and the Company will allow FCX to avoid the cost and administrative expense of complying with burdensome unitary state tax laws. FCX has a limited presence in the United States and following the Distribution should be subject to tax only in one or two states based on its current business operations. Strategic Alliance In May 1995, the Company, FCX, RTZ, RTZA and RTZI entered into agreements to establish a strategic alliance between FCX and RTZ. RTZ is one of the world's leading international mining companies based in the United Kingdom. RTZ's substantial interests in mining include: copper, gold, iron ore, aluminum, zinc and silver in metals, coal and uranium in energy, and borates, titanium dioxide feedstock, talc, diamonds and zircon in other minerals. These interests are located predominantly in North America and Australasia as well as in Europe, southern Africa and South America. RTZA's three major wholly owned subsidiaries are Kennecott Corporation, the RTZ Borax group and QIT-Fer et Titane. Kennecott Corporation's major operation is Bingham Canyon, one of the world's largest open-pit copper mines, which is located in Utah. The RTZ Borax group, through U.S. Borax, Inc., owns and operates one of the world's largest mines, located in California's Mojave Desert. Pursuant to the proposed transactions, the Company and FCX, on the one hand, and RTZ, RTZA and RTZI, on the other hand, entered into a Purchase Agreement dated as of May 2, 1995 pursuant to which RTZI purchased 21,531,100 shares of FCX Class A Common Stock from the Company for $450 million. The statements contained herein with respect to the Purchase Agreement are brief summaries of the material provisions of such agreement and are qualified in their entirety by the complete text of such agreement, which was filed on May 26, 1995 with the Securities and Exchange Commission as an exhibit to the Company's Current Report on Form 8-K. RTZI also received an option to acquire from the Company prior to the Distribution up to 3,588,517 shares of FCX Class A Common Stock at a purchase price of $20.90 per share. If RTZI does not exercise such option, the Company may sell some or all of such FCX Class A Common Stock to other buyers. In addition, if the Company redeems any Notes, the Company may request RTZI to purchase up to 16.8 million additional shares of FCX Class A Common Stock from the Company at a purchase price of $20.90 per share. Pursuant to the Purchase Agreement, FCX has entered into a registration rights agreement with RTZ, RTZA and RTZI pursuant to which RTZ has the right to request that FCX effect a registered public offering of, and RTZ has the right to participate in a registered public offering by FCX or by another stockholder by selling in such offering, certain shares of FCX Common Stock. In addition, pursuant to the Purchase Agreement, the Company has entered into a registration rights agreement with RTZ and RTZA pursuant to which RTZ has the right to request that the Company effect a registered public offering of, and RTZ has the right to participate in a registered public offering by the Company or by another stockholder by selling in such offering, certain shares of the Company's Common Stock. RTZ and its subsidiaries are expected to contribute substantial operating and management expertise to FCX's business. Representatives of RTZI, in proportion to RTZI's ownership in FCX, will be nominated to the FCX Board of Directors. In addition, RTZ and FCX will exchange management personnel and establish an Operating Committee, consisting of personnel of FCX and RTZ, through which the policies established by the FCX Board of Directors will be implemented. FCX and RTZ have entered into an Implementation Agreement, dated as of May 2, 1995 (the "Implementation Agreement") pursuant to which FCX and RTZ agreed to the steps their respective affiliates will take to implement certain transactions relating to joint venture arrangements in Indonesia and the sale of a portion of FCX's Spanish operations to RTZ. Under the proposed joint venture arrangements PT-FI will enter into a participation agreement with an affiliate of RTZ to be organized under the laws of Indonesia ("PT-RTZ") (the "Participation Agreement"). Under the Participation Agreement, PT-FI and PT-RTZ will establish exploration and development joint ventures in the COW Area. PT-FI will establish an Exploration Committee on which representatives of PT-RTZ will serve to approve exploration expenditures in the COW Area and PT-RTZ will pay for all exploration costs approved by the committee until RTZ has paid an aggregate of $100 million in respect of exploration expenses related to the COW Area or the Eastern Mining COW Area. PT-RTZ will acquire a 40% undivided interest in the COW, excluding any interest in PT-FI's current mining and milling operations. For expansion projects in Block A, affiliates of RTZ will provide up to a maximum of $750 million for 100% of defined costs to develop such projects. Affiliates of RTZ will receive 100% of incremental cash flow attributed to the expansion projects until they have received an amount equal to the funds they have provided for approved expansion projects plus interest based on RTZ's cost of borrowing. Subsequently, the parties will share ratably in incremental cash flow with 60% to PT-FI and 40% to PT-RTZ. Future expansion projects in Block A will exclude any interest in future production equivalent to FCX's expanded 118,000 tonnes of ore per day milling operations based on its proved and probable ore reserves as of December 31, 1994. Apart from RTZ's provision of the $750 million for Block A expansions, all costs of development projects mutually agreed upon by PT-FI and PT-RTZ will be shared ratably in proportion to the parties' ownership interests therein. The Implementation Agreement provides that if the closing in respect of, among other things, the Participation Agreement, is not executed prior to December 31, 1996, RTZ shall have the option to cause the Implementation Agreement to lapse and the obligations of the parties thereunder, including the obligation to execute the Participation Agreement, shall thereafter terminate. The Implementation Agreement also provides that each of FCX and RTZ will negotiate in good faith with a view to agreeing as soon as practicable one or more agreements in respect of the Eastern Mining COW, in substantially the form of the Participation Agreement, as modified to reflect the parties' intentions as set out in the letter of intent, dated March 7, 1995, between FCX and RTZ, or otherwise to provide an alternative structure which achieves the same business objective on a mutually more favorable basis from tax, accounting, corporate and regulatory perspectives. FCX and RTZ agreed in the Implementation Agreement to negotiate in good faith with a view to agreeing as soon as practicable one or more agreements in respect of the acquisition by RTZ and its subsidiaries of a 25% interest in the Huelva smelter of RTM and certain exploration rights of RTM and its subsidiaries in Spain at a price pro rata to FCX's cost of acquisition, or otherwise to provide an alternative structure which achieves the same business objective on a mutually more favorable basis from tax, accounting, corporate and regulatory perspectives. Price Range of the Notes The Notes are listed and traded on the NYSE. The following table sets forth the high and low sale prices of the Notes expressed as a percentage of principal amount at maturity of the Notes as reported by the NYSE for the fiscal periods indicated: Fiscal Quarter Notes -------------- ------------------------ High Low ------ ------ 1993: 2nd Quarter 99.50% 91.00% 3rd Quarter 93.25 90.00 4th Quarter 93.50 88.50 1994: 1st Quarter 95.75 91.13 2nd Quarter 93.00 86.50 3rd Quarter 94.75 89.00 4th Quarter 94.75 89.00 1995: 1st Quarter 92.50 89.00 2nd Quarter (through May 30) 92.00 90.50 Price Range of the Common Stock The Common Stock is listed and principally traded on the NYSE. The following table sets forth the high and low sale prices of the Common Stock as reported by the NYSE for the fiscal periods indicated: Fiscal Quarter Common Stock -------------- ----------------------- High Low ------ ------ 1993: 2nd Quarter $22.25 $18.13 3rd Quarter 19.38 17.50 4th Quarter 19.88 15.75 1994: 1st Quarter 21.75 18.75 2nd Quarter 19.75 16.25 3rd Quarter 20.00 16.13 4th Quarter 19.88 16.75 1995: 1st Quarter 18.63 16.75 2nd Quarter (through May 30) 18.63 16.88 The Common Stock issuable upon conversion of the Notes has been registered under the Securities Act of 1933. Dividends In early 1992 the Company's Board of Directors fixed the amount of the regular quarterly Common Stock cash dividend at $.3125 per share. In May 1994, the Board of Directors announced that the Company, in lieu of paying a $.3125 quarterly cash dividend on the Common Stock, would plan to distribute quarterly property dividends in the form of FCX Class A Common Stock at a proposed rate of one FCX share for each 80 shares of the Company's Common Stock. Fractional shares of FCX Common Stock have not been issued in connection with such dividend distributions. Each Common Stockholder of the Company entitled to receive a fractional share of FCX Common Stock received cash in lieu of the fractional share. In light of the anticipated Distribution, however, the Board of Directors did not declare the dividend in 1995 which would normally be paid on June 1. Subsequent to the Distribution, the Board of Directors of the Company will determine an appropriate new dividend policy for the Company, which will depend upon, among other things, the Company's earnings and cash flow, its business and prospects and applicable restrictions under Delaware law. The Certificate of Incorporation of the Company provides that no dividend may be made on the Common Stock unless all dividends theretofore payable on the Preferred Stock have been declared or paid. In May 1994, the Company also announced that, based on the then current outlook, management expects FCX to maintain its current quarterly dividend of $0.15 per share through the start-up of FCX's current expansion project in Indonesia and that, subsequently, FCX's dividend policy can be expected to be determined by its future financial performance. Description of the Common Stock The following statements are brief summaries of the material provisions relating to the Company's Common Stock and are qualified in their entirety by the provisions of the Company's Restated Certificate of Incorporation (the "Certificate of Incorporation"), which has been filed with the Securities and Exchange Commission. The holders of Common Stock are entitled to voting rights for the election of directors and for other purposes, subject to the voting rights of the holders of the Company's $4.375 Convertible Exchangeable Preferred Stock (the "Preferred Stock") conferred by law and to the specific voting rights granted to each series of Preferred Stock and to voting rights which may in the future be granted to subsequently created series of preferred stock. Dividends may be declared on Common Stock out of funds legally available therefor when all required dividend and redemption requirements for Preferred Stock have been met. In the event of any liquidation of the Company, the holders of Preferred Stock are entitled to be paid out of the net assets of the Company, before any distribution is made to the holders of Common Stock, the applicable liquidation value plus accrued but unpaid dividends to the date of payment. Thereafter, the holders of Common Stock are entitled to a pro rata distribution of the remaining assets. Holders of Common Stock have no preemptive rights. The Certificate of Incorporation provides that, in general, an affirmative vote of not less than 85% of the outstanding shares of Common Stock of the Company is required to approve or authorize certain major corporate transactions involving the Company and holders of more than 20% of the Common Stock (including certain mergers, substantial dispositions of assets, liquidation or dissolution, or recapitalization). The 85% vote is not required in some such circumstances, including certain transactions which have been approved in advance by a majority of the Board of Directors, or where holders of Common Stock receive a price per share that satisfies the fairness criteria set forth in the Certificate of Incorporation. In addition, under the terms of the Certificate of Incorporation, the Board of Directors of the Company is divided into three classes, with each class serving three year terms. At the annual meeting of stockholders of the Company, the term of one class of directors expires, and the successors of that class are elected. Furthermore, any action required or permitted to be taken by the stockholders of the Company must be effected at a duly-called annual or special meeting, and may not be taken by written consent of the stockholders. In general, special meetings of the stockholders of the Company may be called only by the Chairman of the Board or the President or at the request of a majority of the Board of Directors. Solicitation of Conversions; Fees The Company has not retained any agents to solicit conversions of the Notes to Common Stock, and the Company will not make any payments to brokers, dealers or others for soliciting such conversions. The Company has retained Chemical Bank as Paying Agent in connection with any redemptions or conversions of the Notes. The Paying Agent will receive reasonable and customary compensations for their services in connection with such matters, will be reimbursed for their reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including liabilities under the federal securities laws. The Company will also reimburse brokers, dealers, commercial banks and trust companies for customary handling and mailing expenses incurred in forwarding this Notice of Redemption, the Letter of Transmittal and related materials to their customers. Interests of Certain Persons in the Transaction A trust for the benefit of Richard C. Adkerson, Senior Vice President and Chief Financial Officer of the Company, beneficially owns $16,000 aggregate principal amount of Notes. Except as stated herein, as of May 30, 1995, none of the executive officers or directors of the Company beneficially owned any of the Notes. Transactions and Agreements Concerning the Notes and the Common Stock On March 24, 1995 the Company offered to exchange 2.85 shares of Common Stock for each share of its Preferred Stock upon the terms and subject to the conditions set forth in an offering circular dated March 24, 1995 and in the related letter of transmittal (the "Exchange Offer"). Pursuant to the Exchange Offer, on April 24, 1995 the Company accepted for exchange 3,998,310 shares of Preferred Stock for 11,395,181 shares of Common Stock. Except as described above, during the 40 business days preceding the date hereof neither the Company nor, to its knowledge, any of its subsidiaries, executive officers or directors or any associate of any such officer or director has engaged in any transaction involving the Notes or the Common Stock. Tax Considerations A holder of the Notes who does not convert any portion of his Notes into Common Stock will recognize gain or loss on the redemption of the Notes for cash, measured by the difference between the amount of cash received and his tax basis in the Notes. Provided the Notes are held as a capital asset and have been held for more than one year, any gain or loss recognized would be long term capital gain or loss. A holder of Notes who converts all of his Notes into Common Stock will not recognize taxable gain or loss on the conversion, except for the receipt of cash in lieu of fractional shares. A holder who converts a portion of his Notes into Common Stock and receives cash in redemption of a portion of his Notes will realize gain or loss, measured by the difference between (i) the sum of the fair market value of the Common Stock and the amount of cash received and (ii) his tax basis in all of the Notes surrendered, but the amount of gain recognized will not exceed the amount of cash received. The gain recognized generally would be capital gain if the holder does not own, directly or indirectly, a substantial stock interest in the Company. The Company urges holders of Notes to consult their own tax advisors as to federal, state and local tax treatment applicable to them on conversion or redemption. SUMMARY FINANCIAL INFORMATION Set forth below is certain consolidated historical financial information of the Company and its subsidiaries derived from the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994 and from the unaudited consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the calendar quarter ended March 31, 1995. More comprehensive financial information is included in such reports and the financial information which follows is qualified in its entirety by reference to such reports and all of the financial statements and related notes contained therein, copies of which may be obtained as set forth in "Additional Available Information". The pro forma financial data assumes, in separate columns, that (1) 100% of the outstanding Notes are converted into Common Stock and (2) 100% of the outstanding Notes are redeemed. The financial information of the Company and its subsidiaries will not be representative of the Company and its subsidiaries after the Distribution, following which the only material portion of the Company's business will be its interest in FRP and in the sulphur and agricultural businesses conducted by FRP.
Pro Forma - Pro Forma - Historical 100% Conversion 100% Redeemed ------------------------------------------------- ------------------------ ------------------------ Three Three Year Months Year Months Years Ended Three Months Ended Ended Ended Ended December 31, Ended March 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31, 1993 1994 1994 1995 1994 1995 1994 1995 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------- (amounts in thousands, except per share amounts and ratios) Revenues $1,610,581 $1,982,396 $ 449,594 $ 663,285 $1,982,396 $ 663,285 $1,982,396 $ 663,285 Interest expense, net 79,882 91,834 23,430 25,059 60,528 17,083 60,626 17,105 Minority interests in net income (loss) of sub- sidiaries (61,689) 168,951 26,891 70,740 168,951 70,740 175,356 74,330 Provision for income taxes 17,854 148,388 33,027 50,127 159,345 52,919 159,310 52,911 Net income (loss) applicable to Common Stock (126,203) 41,443 12,373 19,391 61,792 24,575 55,324 20,971 Average common shares outstanding 141,595 139,223 141,063 137,326 160,085 158,188 139,223 137,326 Net income (loss) per common share, before extraordinary items and accounting changes (0.74) 0.37 0.13 0.14 0.44 0.16 0.46 0.15 Net income (loss) per common share (0.89) 0.30 0.09 0.14 0.39 0.16 0.40 0.15 Ratio of earnings to fixed charges - 2.0x 1.9x 2.4x 2.2x 2.7x 2.2x 2.7x Total assets 3,714,067 4,373,575 3,859,990 4,606,035 4,369,477 4,602,109 4,302,431 4,535,063 Long-term debt, including current portion, and short term borrowings 1,331,680 1,671,294 1,290,411 1,865,128 1,353,057 1,545,277 1,353,057 1,545,277 Stockholders' equity 649 (230,467) (23,703) (256,543) 94,937 64,540 (48,598) (77,951) Book value per common share (1.83) (3.50) (2.00) (3.71) (0.98) (1.18) (2.18) (2.40) Assumes 100% of the Notes outstanding are converted into Common Stock at a conversion rate of 55.95 shares of Common Stock for each $1,000 principal amount of Notes. Assumes 100% of the Notes outstanding are redeemed for $942.16 per $1,000 principal amount of Notes, and FTX finances the redemption by selling shares of FCX Class A common stock at a price of $20.90 per share. Earnings are income from continuing operations before income taxes, minority interests and fixed charges. Fixed charges are interest, that portion of rent deemed representative of interest and the preferred stock dividend requirements of FCX. In 1993 earnings were inadequate to cover fixed charges by $241.8 million.
ADDITIONAL AVAILABLE INFORMATION The Company's 1994 Annual Report and its Proxy Statement with respect to its 1995 annual meeting have been filed with the Securities and Exchange Commission (the "Commission"). Copies of such documents, as well as the Company's Annual Report on Form 10-K for the year ended December 31, 1994, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995 and the Company's Current Report on Form 8-K filed with the Commission on May 26, 1995, may be obtained from the Company's Secretary, 1615 Poydras Street, New Orleans, Louisiana 70112, telephone (504) 582-4000. The Company is subject to the informational filing requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith is obligated to file reports and other information with the Commission relating to its business, financial statements and other matters. Certain information as of particular dates, concerning the Company's directors and officers, their remuneration, options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is filed with the Commission. Such reports, as well as such other material, may be inspected and copies obtained at prescribed rates at the Commission's public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, 13th Floor, New York, New York 10048; and 500 West Madison Street, Chicago, Illinois 60661. The Company has also filed with the Commission a statement on Schedule 13E-4 that contains additional information with respect to the transactions described in this Notice of Redemption. Such Schedule and certain amendments thereto may be examined and copies may be obtained at the same places and in the same manner as set forth above (except that any such Schedule may not be available in the regional offices of the Commission). FREEPORT-McMoRan INC. May 31, 1995 EX-99.9(A)(2) 3 LETTER OF TRANSMITTAL To Accompany Certificates of 6.55% Convertible Subordinated Notes due January 15, 2001 of FREEPORT-McMoRan INC. Name and Address of Paying Agent: Chemical Bank Delivery Address of Paying Agent: By Mail: By Courier: By Hand: Chemical Bank Chemical Bank Chemical Bank Debt Operations Department IDS Mail Services Room 234 -- North Church Street Station 450 West 33rd Street Building P.O. Box 1385 Bay 13 Corporate Trust New York, NY 10008-1385 New York, NY 10001 Securities Window 55 Water Street New York, NY 10041 This Letter of Transmittal and accompanying certificate(s) must be received by the Paying Agent at the above address in order to constitute a valid delivery. Delivery of this Letter of Transmittal to an address other than as set forth above, or transmission of instructions via facsimile or telex to the Paying Agent, does not constitute a valid delivery. The Instructions accompanying this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed. This Letter of Transmittal is to be used to accompany certificates of 6.55% Convertible Subordinated Notes due January 15, 2001 (the "Notes") of Freeport-McMoRan Inc. (the "Company") surrendered for conversion or redemption as described in the Company's Notice of Redemption dated May 31, 1995 (the "Notice of Redemption"). To: Chemical Bank Reference is made to the Notice of Redemption, receipt of which is hereby acknowledged, whereby the Company has called for redemption on June 30, 1995 (the "Redemption Date") all of the Notes outstanding on that date at a redemption price, including accrued and unpaid interest to and including the Redemption Date, of $942.16 for each $1,000 principal amount of Notes (the "Redemption Price"). As an alternative to redemption, the Notes may be converted, until 5:00 p.m. (New York City time) on the Redemption Date and at the option of the holder, into shares of Common Stock, $1.00 par value, of the Company (the "Common Stock") at a conversion rate equal to 55.95 shares of Common Stock per each $1,000 principal amount of Notes. If you wish to convert your Notes into shares of Common Stock, your Note certificates(s) and this Letter of Transmittal or other written notice of election must be received by the Paying Agent at the address shown above no later than 5:00 p.m. (New York City time) on the Redemption Date. Notes received after 5:00 p.m. (New York City time) on the Redemption Date will be redeemed at the Redemption Price. Although no assurance can be given as to the future market value of the Common Stock, so long as the market price of the Common Stock is more than $16.84 per share, holders of Notes will receive upon conversion thereof shares of Common Stock, and cash in lieu of fractional shares, having a greater current market value than the amount of cash that they would otherwise receive upon redemption. On May 30, 1995 the closing price of the Common Stock as reported by the New York Stock Exchange was $17.75 per share. Holders of the Notes are urged to obtain current market prices prior to converting their Notes or surrendering their Notes for redemption. DESCRIPTION OF NOTES DELIVERED ____________________________________________________________________________ |Box A |Please identify below the | |Please fill in your name(s) as it appears|certificates representing the | |on the certificates representing the |Notes enclosed (attach a signed | |Notes and your present address below. |separate list if space below is | | |inadequate) | |____________________________________________________________________________| | | Certificate | Principal | | | Number | Amount | | |__________________|_______________| | | | | | |__________________|_______________| | | | | | |__________________|_______________| | | | | | |__________________|_______________| | | | | | |__________________|_______________| | | | | | |__________________|_______________| | | | | | |__________________|_______________| | | | | | |__________________|_______________| | | Total | | | | Principal Amount | | |____________________________________________________________________________| (PLEASE CHECK ONE OF THE FOLLOWING BOXES) Alternative 1: (Conversion) [ ] The undersigned hereby surrenders the Notes listed above in "Box A -- Description of Notes Delivered" and instructs the Paying Agent, on behalf of the Company (i) to convert such Notes into shares of Common Stock as soon as practicable after the surrender thereof and prior to 5:00 p.m. (New York City time) on June 30, 1995 at a conversion rate equal to 55.95 shares of Common Stock per each $1,000 principal amount of Notes and (ii) to issue to the undersigned (or instead to the person(s) indicated below in "Box B -- Special Issuance and/or Payment Instructions", if completed) a certificate representing the total number of whole shares of such Common Stock resulting from such conversion (a "Common Certificate") plus a check for the value of any fractional share resulting from such conversion (a "Conversion Check"). The undersigned has also completed and signed the Conversion Notice set forth on the reverse of each certificate for the Notes surrendered herewith and to be converted in accordance with the foregoing. Alternative 2: (Redemption) [ ] The undersigned hereby surrenders the Notes listed above in "Box A -- Description of Notes Delivered" and enclosed herewith for redemption at the Redemption Price and instructs the Paying Agent, on behalf of the Company, to issue to the undersigned (or instead to the person(s) indicated below in "Box B -- Special Issuance and/or Payment Instructions", if completed) a check in the amount of the Redemption Price (a "Redemption Check"). Alternative 3: (Conversion and Redemption) [ ] The undersigned hereby surrenders the Notes listed above in "Box A - Description of Notes Delivered" and instructs the Paying Agent, on behalf of the Company (i) to convert such portion of Notes as indicated in "Box D - Allocation of Principal Amount" into shares of Common Stock of the Company as soon as practicable after the surrender thereof and prior to 5:00 p.m. (New York City time) on June 30, 1995 at a conversion rate equal to 55.95 shares of Common Stock per each $1,000 principal amount of Notes, (ii) to issue to the undersigned (or instead to the person(s) indicated below in "Box B - Special Issuance and/or Payment Instructions", if completed) a certificate representing the total number of whole shares of Common Stock resulting from such conversion (a "Common Certificate") plus a check for the value of any fractional share resulting from such conversion (a "Conversion Check") and (iii) to issue to the undersigned (or instead to the person(s) indicated below in "Box B - Special Issuance and/or Payment Instructions", if completed) a check in the amount of the Redemption Price for such Notes as indicated in "Box D - Allocation of Principal Amount" (a "Redemption Check") . Failure to complete "Box D - Allocation of Principal Amount" shall be deemed an election to convert the entire principal balance of surrendered Notes into Common Stock in accordance with the election under Alternative 1. The apportionment of principal balance to be made in "Box D - Allocation of Principal Amount" may only be made in integral multiples of $1,000. The undersigned has also completed and signed the Conversion Notice set forth on each certificate for the Notes surrendered herewith and to be converted in accordance with the foregoing. (Applicable to Alternative 1, Alternative 2 and Alternative 3) Unless otherwise indicated below under "Box B -- Special Issuance and/or Payment Instructions" or "Box C -- Special Delivery Instructions", the undersigned hereby instructs the Paying Agent to deliver (i) the Common Certificate and Conversion Check (if any), if Alternative 1 or Alternative 3 has been elected or (ii) the Redemption Check, if Alternative 2 or Alternative 3 has been elected, to the address indicated above in "Box A -- Description of Notes Delivered". In the event that "Box B -- Special Issuance and/or Payment Instructions" or "Box C -- Special Delivery Instructions" are completed below, the undersigned hereby instructs the Paying Agent to deliver (i) the Common Certificate and Conversion Check (if any), if Alternative 1 or Alternative 3 has been elected or (ii) the Redemption Check, if Alternative 2 or Alternative 3 has been elected, to the applicable address indicated therein. _____________________________________ _____________________________________ | Box B || Box C | | SPECIAL ISSUANCE and/or || SPECIAL DELIVERY INSTRUCTIONS | | PAYMENT INSTRUCTIONS || | | (See Instructions 3 and 5) || Fill in ONLY if the Common | | || Certificate, Conversion Check or | | Fill in ONLY if the Common || Redemption Check (as applicable) is | | Certificate, Conversion Check || to be sent to an address OTHER than | | or Redemption Check (as applicable) || that appearing in Box A or Box B. | | is to be issued in a name OTHER than|| | | the name appearing in Box A above. || | | (Unless otherwise indicated in Box || Name_______________________________ | | C, the Common Certificate, || (Please Print) | | Conversion Check or Redemption || | | Check (as applicable) will be || Address____________________________ | | mailed to the address indicated in || | | his Box B.) || ___________________________________ | | || | | || ___________________________________ | | Name_______________________________ || | | (Please Print) || (Zip Code) | | || ___________________________________ | | Address____________________________ || | | || Area Code | || and Telephone No.__________________ | | ___________________________________ || | | (Zip Code) || | | || | | ___________________________________ || | | Tax Identification or || | | Social Security Number of person || | | || | |_____________________________________||_____________________________________| ____________________________________________________________________________ | Box D | | | | ALLOCATION OF PRINCIPAL AMOUNT | | | | | | This box should be completed ONLY if a portion of the Notes is to be | | surrendered for conversion into Common Stock and the balance is to be | | redeemed. | | | | The principal balance of the Notes surrendered is to be apportioned | | between conversion and redemption as follows: | | | | $ ________ principal amount is to be applied toward conversion and | | | | $ ________ principal amount is to be applied toward redemption. | | | | THE ABOVE APPORTIONMENT MAY ONLY BE MADE IN INCREMENTS OF $1,000 OF | | PRINCIPAL AMOUNT OF NOTES. | |____________________________________________________________________________| ________________________________________________________ | | | SIGN HERE | |________________________________________________________| | | |________________________________________________________| | | =====> |________________________________________________________| <===== | Signature(s) of Owner(s) | | | | Dated: _________________________________________, 1995 | | | | (Must be signed by registered holder(s) exactly as | | name(s) appear(s) on Note certificate(s) or | | by person(s) authorized to become registered | | holder(s) by certificates and documents transmitted | | herewith. If signature is by a trustee, executor, | | administrator, guardian, attorney-in-fact, officer of | | a corporation or other person acting in a fiduciary of| | representative capacity, please provide the following | | information and see Instruction 6.) | | | | | | Name(s)_______________________________________________| | | | ______________________________________________________| | (Please Print) | | | | Capacity ______________________________________________| | | | Address________________________________________________| | | | _______________________________________________________| | (Zip Code) | | | | Area Code and Telephone Number_________________________| | | | Tax Identification or | | Social Seccurity Number _______________________________| | | | Guarantee of Signature(s) | | (See Instructions 3 and 5) | | | | Name of Firm__________________________________________| | | | Address_______________________________________________| | | | ______________________________________________________| | (Zip Code) | | | | Area Code and Telephone No.____________________________| | | | Authorized Signature __________________________________| | | | Name___________________________________________________| | (Please Print) | | Dated:___________________________________________, 1995| | | |________________________________________________________|
PAYER'S NAME: CHEMICAL BANK _______________________________________________________________________________________________________________________________ | | | | | SUBSTITUTE | Part 1 - PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT | | | FORM W-9 | AND CERTIFY BY SIGNING AND DATING BELOW(*) | | | | | | |_______________________________________________________________________________________________________________________________| | | | | Department of | Part 2 - Check the box if you are NOT subject to backup withholding under the provisions of section | | the Treasury | 3406(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are | | Internal Revenue | subject to backup withholding as a result of failure to report all interest or dividends or (2) the | | Service | Revenue Service has notified you that you are no longer subject to backup withholding [ ] | | |__________________________________________________________________________________________________________| | | (*)CERTIFICATION - UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT | | | Payer's Request | THE INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT, AND | Part 3 | | for Taxpayer | COMPLETE. | Awaiting TIN [ ] | | Identification | | | | Number (TIN) | SIGNATURE DATE | | | | | | |_______________________________________________________________________________________________________________________________| YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 ________________________________________________________________________________________________________________________________ | CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER | | | | I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have | | mailed an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or | | Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand | | that, notwithstanding that I have checked the box in Part 3 (and have completed this Certificate of Awaiting Taxpayer | | Identification Number), all reportable payments made to me prior to the time I provide the Paying Agent with a | | properly certified taxpayer identification number will be subject to a 31% backup withholding rate. | | | | SIGNATURE DATE | |________________________________________________________________________________________________________________________________|
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY CASH PAYMENTS MADE TO YOU IN CONNECTION WITH THE REDEMPTION OR CONVERSION OF THE NOTES. FOR ADDITIONAL DETAILS PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 INSTRUCTIONS 1. Completion and Delivery of Letter of Transmittal. Please do not send certificates representing Notes directly to the Company. This Letter of Transmittal or photocopy facsimile hereof should be properly filled in, dated and signed, and delivered or sent with your Note certificate(s) and any required supporting documents to the Paying Agent, at the appropriate address listed on the front hereof. If you elect to convert your Notes into shares of Common Stock pursuant to Alternative 1 or Alternative 3, please also complete and sign the Conversion Notice set forth on the reverse of each Note certificate surrendered herewith. The method of submission is at your option and risk; but if sent by mail, transmission by registered mail with return receipt requested, properly insured, is recommended. A return envelope addressed to the Paying Agent is enclosed for your convenience. Additional copies of this Letter of Transmittal or the Notice of Redemption may be obtained from Georgeson & Company Inc., Wall Street Plaza, New York, NY 10005 (tel. no. 800-223-2064). Note: Notes surrendered for conversion must be received by the Paying Agent by 5:00 p.m. (New York City time) on June 30, 1995, notwithstanding the date of postmark. 2. Signatures. The signature (or signatures, in the case of certificates owned by two or more joint holders) on the Letter of Transmittal must correspond exactly with the name(s) that appear(s) on the face of the Note certificate(s) surrendered, unless the Notes represented thereby have been assigned by the registered holder, in which event the Letter of Transmittal should be signed in exactly the same form as the name of the last transferee indicated on the transfers attached to or endorsed on the certificate(s). (See Instruction 5 below.) 3. Issuance of Redemption Check. If the Redemption Check in payment of the Notes surrendered for redemption is to be issued in a name different from that appearing on the face of the surrendered certificate(s), the certificate(s) must be properly endorsed in blank by the registered holder thereof or accompanied by a duly executed instrument of assignment in blank and the signature to the endorsement or assignment must be guaranteed by an eligible guarantor institution which has been approved by the Paying Agent (the "Qualified Guarantor") . Such institutions generally include banks, brokers, dealers, credit unions, savings associations and other entities which are members in good standing of the Securities Transfer Agents Medallion Program. 4. Issuance of Common Certificate and Conversion Check (if any) in the Same Name. If the Common Certificate and Conversion Check (if any) are to be issued in the name(s) of the record holder as inscribed on the surrendered Note certificate(s), the surrendered certificate(s) need not be endorsed. For corrections in name or changes in name(s) not involving changes in ownership, see Instruction 5(d) below. 5. Issuance of Common Certificate and Conversion Check (if any) in a Different Name. If the Common Certificate and Conversion Check (if any) are to be issued in a name different from the name(s) of the record holder as inscribed on the surrendered Note certificate(s), please be guided by the following: (a) Endorsement and Guarantee. The Note certificate(s) surrendered must be properly endorsed or accompanied by appropriate assignments properly executed by the record holder of such certificate(s) to the person who is to receive the Common Certificate and/or Conversion Check. The signature(s) of the record holder on the endorsement or assignments must correspond with the name(s) that appear(s) on the face of the certificate(s) in every particular and must be guaranteed by a Qualified Guarantor as defined in Instruction 3. (b) Transferee's Signature. If a certificate has been properly transferred and the transfer has not yet been recorded on the books of the Company, this Letter of Transmittal must be signed by the transferee or by his agent and should not be signed by the transferor. The signature of such transferee or agent on this Letter of Transmittal must be guaranteed by a Qualified Guarantor as defined in Instruction 3. (c) Transfer Taxes. In the event that any transfer or other taxes become payable by reason of the issuance of the Common Certificate and Conversion Check (if any) in any name other than that of the record holder, such transferee or assignee must pay such tax to the Company or must establish to the satisfaction of the Company that such tax has been paid. (d) Correction of or Change in Name. For correction of name or for a change in name which does not involve a change of ownership, proceed as follows: For a change in name by marriage, etc., the surrendered certificate(s) should be endorsed, e.g., "Mary Doe, now by marriage Mrs. Mary Jones," with the signature guaranteed by a Qualified Guarantor as defined in Instruction 3. For a correction in name, the surrendered certificates should be endorsed, e.g., "James E. Brown, incorrectly inscribed as James S. Brown," with the signature guaranteed by a Qualified Guarantor as defined in Instruction 3. 6. Supporting Evidence. In case any Letter of Transmittal or certificate endorsement is executed by an agent, attorney, administrator, executor, guardian, trustee or in any other fiduciary or representative capacity, or by an officer of a corporation on behalf of the corporation, there should be submitted documentary evidence of appointment and authority to act in such capacity (including court orders and corporate resolutions where necessary), as well as evidence of the authority of the person making such execution to assign, sell or transfer the shares. Such documentary evidence of authority must be in form satisfactory to the Paying Agent. 7. Lost or Destroyed Certificate(s). If your Note certificate(s) has been either lost or destroyed, notify the Paying Agent of this fact promptly at its address set forth above. You will then be instructed as to the steps you must take in order to convert, sell or redeem the Notes that you own. 8. Substitute Form W-9. Under the federal income tax laws, the Paying Agent may be required to withhold 31% of the amount of any cash payments to holders in connection with the conversion or redemption of the Notes. In order to avoid such backup withholding, each holder surrendering Notes for conversion or redemption must, unless it has previously done so (i) provide the Company with the correct taxpayer identification number of the registered holder(s) of the Notes delivered herewith (or of the person authorized to become the registered holder by certificates or documents transmitted herewith) by completing the Substitute Form W-9 set forth above or (ii) submit satisfactory evidence that such holder is exempt from such backup withholding and reporting requirements. In general, if a holder is an individual, the taxpayer identification number is the Social Security number of such individual. Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order to satisfy the Company that a foreign individual qualifies as an exempt recipient, such holder must submit a statement, signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Paying Agent. For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a taxpayer identification number if you do not have one and how to complete the Substitute Form W-9 if the Notes are held in more than one name), consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. Failure to complete the Substitute Form W-9 will not, by itself, cause the Notes to be deemed invalidly tendered, but may require the Company to withhold 31% of the amount of cash payments to the holders, if the holder has not previously furnished the Company with its correct taxpayer identification number. Backup withholding is not an additional federal income tax. Rather, the federal tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained. 9. Inquiries. All inquiries with respect to the surrender of the Note certificate(s) for conversion or redemption should be made directly to Georgeson & Company Inc., by mail at Wall Street Plaza, New York, NY 10005, or by telephone at (800) 223-2064. EX-99.9(A)(3) 4 EXHIBIT 9(a)(3) FREEPORT-McMoRan INC. May 31, 1995 TO: Holders of Our 6.55% Convertible Subordinated Notes due January 15, 2001 -------------------------- Freeport-McMoRan Inc. (the "Company") has called all of its outstanding 6.55% Convertible Subordinated Notes due January 15, 2001 (the "Notes") for redemption on June 30, 1995 (the "Redemption Date"). The redemption price, including accrued and unpaid interest to and including the Redemption Date, is $942.16 for each $1,000 principal amount of Notes (the "Redemption Price"). The Notes are convertible into shares of Common Stock, $1.00 par value, of the Company (the "Common Stock") at the conversion rate described below until 5:00 p.m. (New York City time) on the Redemption Date. At 5:00 p.m. (New York City time) on the Redemption Date, the conversion privilege expires. Notes which have not been converted into Common Stock by that time will be redeemed on that date. From and after the Redemption Date, interest on the Notes shall cease to accrue and holders of the Notes shall have no right in respect thereof except the right to receive the Redemption Price thereof upon surrender of certificates representing the Notes, unless the Company shall not pay the Redemption Price on the Redemption Date. The Notes are convertible into Common Stock of the Company at a conversion rate equal to 55.95 shares of Common Stock per each $1,000 principal amount of Notes (the "Conversion Rate"), until 5:00 p.m. (New York City time) on the Redemption Date. The Conversion Rate reflects an enhancement made by the Company to the rate otherwise applicable to the Notes to make conversion more financially attractive to the holders thereof, as more fully described in the enclosed Notice of Redemption. In lieu of fractional shares, the Company will pay the holder of converted Notes cash equal to the value of any fractional share. Although no assurance can be given as to the future market value of the Common Stock, so long as the price of the Common Stock is more than $16.84 per share, holders of Notes will receive upon conversion thereof shares of Common Stock, and cash in lieu of fractional shares, having a greater current market value than the amount of cash that they would otherwise receive upon redemption. On May 30, 1995, the closing price of the Common Stock as reported by the New York Stock Exchange was $17.75 per share. Holders of the Notes are urged to obtain current market prices prior to converting their Notes or surrendering their Notes for redemption. A copy of the Notice of Redemption, the Letter of Transmittal (which sets forth a full description of the terms of the redemption, the alternatives available to you and the procedures for surrendering your Notes) and Guidelines for Certification of Taxpayer Identification Number are enclosed. The enclosed Letter of Transmittal may be used to surrender the Notes for conversion or redemption. The method of delivery of the Notes to Chemical Bank (the "Paying Agent") is at the option and risk of the holder, but if mail is used, registered mail with return receipt requested, properly insured, is suggested. Important additional delivery instructions are contained in the enclosed Letter of Transmittal. If you wish to convert your Notes into Common Stock, the Notes, together with a properly completed Letter of Transmittal must be received by the Paying Agent prior to 5:00 p.m. (New York City time) on the Redemption Date. Please allow sufficient time to assure that your Notes will be received by that date. Please read the enclosed documents carefully. If you desire additional copies of any of the documents, you may call Georgeson & Company Inc. at (800) 223-2064. FREEPORT-McMoRan INC. Enclosures: - ----------- Notice of Redemption Letter of Transmittal Guidelines for Certification of Taxpayer Identification Number Return envelope addressed to: Chemical Bank EX-99.9(A)(4) 5 EXHIBIT 9(a)(4) NEWS RELEASE NYSE COMMON STOCK SYMBOL "FTX" Financial Contacts Chris D. Sammons Craig E. Saporito (504) 582-4474 (504) 582-4476 Freeport-McMoRan Global Resource Companies FREEPORT-McMoRan INC. TO REDEEM 6.55% CONVERTIBLE SUBORDINATED NOTES DUE JANUARY 15, 2001 NEW ORLEANS, LA., May 31, 1995 -- Freeport-McMoRan Inc. (NYSE:FTX) announced today that it has called for redemption on June 30, 1995 all of its outstanding 6.55% Convertible Subordinated Notes due January 15, 2001 (the "Notes"), having a total of approximately $373 million principal value at maturity. The redemption price will be $942.16 for each $1,000 principal amount of the Notes including accrued interest of $30.02 from January 15, 1995. A notice of redemption will be mailed today by FTX to all holders of record of the Notes. As an alternative to redemption and at the option of the holder, the Notes are convertible until 5:00 p.m. (New York City time) on the June 30, 1995 redemption date into 55.95 shares of FTX common stock for each $1,000 principal amount of Notes. The conversion rate reflects an enhancement made by FTX to the rate otherwise applicable to the Notes to make conversion more financially attractive to holders of the Notes. So long as the market price of FTX common stock is more than $16.84 per share, holders of the Notes will receive more value upon conversion of the Notes into shares of FTX common stock and cash in lieu of fractional shares, than the cash that they would otherwise receive upon redemption. On May 30, 1995 the closing price of FTX common stock as reported on the New York Stock Exchange Composite Tape was $17.75. The redemption and/or conversion of the Notes is part of the previously announced restructuring of FTX and subsequent tax-free distribution of Class B common stock of Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) owned by FTX to holders of FTX common stock. As part of the restructuring, FTX has sold approximately 21.5 million Class A common shares in FCX to a subsidiary of The RTZ Corporation PLC (RTZ) and RTZ has an option to buy an additional approximately 3.5 million Class A common shares of FCX at $20.90 per share. FTX's agreements with RTZ also provide that FTX may request RTZ to tender for the Notes. However, FTX has elected not to request RTZ to tender for the Notes since FTX believes, for various reasons including timing considerations, that the conversion rate enhancement and the absence of a tender offer by RTZ will result in the most favorable outcome. The agreements provide that, if any or all of the Notes are redeemed, then, at FTX's option, RTZ is obligated to purchase from FTX additional FCX Class A common shares at $20.90 per share in order to finance the redemption. FTX anticipates that the maximum number of additional FCX Class A common shares to be acquired by RTZ, including its 3.5 million share purchase option, will not exceed 16.8 million shares. FTX is a leader in the exploration, mining, development, production, processing and marketing of natural resources. The company's products include copper, gold, silver, phosphate fertilizers, phosphate rock, sulphur, oil and other natural resources. * * * -----END PRIVACY-ENHANCED MESSAGE-----