-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N7J+qz6ra0Xf0VzUJ/fX1ES9z9dJP0nXoX9N/r3Vctm6w1pJJ1D4S2pyf/ZTl88+ ABpG2POa6YT3WJzLvO6kCQ== /in/edgar/work/0000950147-00-001045/0000950147-00-001045.txt : 20000717 0000950147-00-001045.hdr.sgml : 20000717 ACCESSION NUMBER: 0000950147-00-001045 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PHELPS DODGE CORP CENTRAL INDEX KEY: 0000078066 STANDARD INDUSTRIAL CLASSIFICATION: [3330 ] IRS NUMBER: 131808503 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-00082 FILM NUMBER: 672611 BUSINESS ADDRESS: STREET 1: 2600 NORTH CENTRAL AVE CITY: PHOENIX STATE: AZ ZIP: 85004-3089 BUSINESS PHONE: 6022348100 MAIL ADDRESS: STREET 1: 2600 NORTH CENTRAL AVENUE CITY: PHOENIX STATE: AZ ZIP: 85004-3089 11-K 1 0001.txt ANNUAL RPT FOR THE FISCAL YEAR ENDED 12/31/99 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number 1-82 CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES PHELPS DODGE CORPORATION 2600 NORTH CENTRAL AVENUE PHOENIX, ARIZONA 85004-3089 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees In our opinion, the accompanying statements of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees (the "Plan") at December 31, 1999 and 1998, and the changes in net assets available for benefits for the year ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes at end of year and of reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP July 12, 2000 Phoenix, Arizona CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1999 AND 1998 - -------------------------------------------------------------------------------- 1999 1998 ---------- ---------- ASSETS Investments (note 3) $4,955,642 $3,722,935 Receivables: Employer contributions 6,063 139 Participant contributions and loan repayments 22,154 28,862 ---------- ---------- Total assets 4,983,859 3,751,936 ---------- ---------- Net assets available for benefits $4,983,859 $3,751,936 ========== ========== The accompanying notes are an integral part of these financial statements. - 2 - CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 1999 - -------------------------------------------------------------------------------- Additions to net assets attributable to: Investment income: Interest and dividends $ 249,617 Net appreciation in fair value of investments (Note 3) 881,486 ---------- Total investment income 1,131,103 Employer contributions 75,908 Participant contributions and loan repayments 275,827 ---------- Total additions 1,482,838 ---------- Decrease in net assets attributable to: Benefits paid to participants 250,915 ---------- Total deduction 250,915 ---------- Net increase 1,231,923 Net assets available for benefits, at beginning of year 3,751,936 ---------- Net assets available for benefits, at end of year $4,983,859 ========== The accompanying notes are an integral part of these financial statements. - 3 - CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following description of the Cyprus Amax Minerals Company ("Cyprus Amax") Thrift Plan for Bargaining Unit Employees (the "Plan" or the "Bargaining Plan") provides only general information. Refer to the Plan document for a more complete description of the Plan's provisions. GENERAL The Plan was established by AMAX Inc. ("AMAX") in 1965 for the benefit of certain collective bargaining unit hourly employees of AMAX, its divisions and its participating subsidiaries, who have completed one year of service and have attained the age of 18 ("Eligible Employees" or "Participants"). Cyprus Minerals Company ("Cyprus") and AMAX merged in November 1993, forming Cyprus Amax Minerals Company ("Cyprus Amax" or the "Company"). Following the merger, the name of the Bargaining Plan was changed to the Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees. Currently, the Plan consists solely of Amax Metals Recovery employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Phelps Dodge Corporation ("Phelps Dodge") became the sponsor of the Plan on October 16, 1999, following its acquisition of Cyprus Amax. As a result of the acquisition of Cyprus Amax by Phelps Dodge, all shares of Cyprus Amax stock held on October 16, 1999 were converted on November 5 and December 3, 1999 into Phelps Dodge common stock. On the November 5, 1999 conversion date, participants had the option of converting each share of Cyprus Amax stock into .35 shares of Phelps Dodge common stock or receiving $13.488782 in cash per share of Cyprus Amax stock plus .1201522 shares of Phelps Dodge common stock. If the latter option was selected the cash portion was deposited into the Prime Reserve Fund. On the December 3, 1999 conversion date, participants received .35 shares of Phelps Dodge common stock for each share of Cyprus Amax stock. All Phelps Dodge common stock is held in the common stock fund. ADMINISTRATION The Plan is administered by the Cyprus Amax Minerals Corporation Benefits Committee (the "Plan Administrator"), a committee appointed by Phelps Dodge's Board of Directors consisting of three Phelps Dodge officers. Prior to October 16, 1999, the Plan was administered by the Cyprus Amax Minerals Company Benefits Committee consisting of Cyprus Amax officers. T. Rowe Price Retirement Plan Services, Inc. serves as the Plan's recordkeeper and T. Rowe Price Trust Company serves as the trustee. During 1999, Plan administrative expenses were paid by Cyprus Amax and Phelps Dodge. CONTRIBUTIONS Participants may contribute a basic amount of 1 percent to 16 percent of compensation to the Plan. These basic contributions are made on an after-tax basis, a tax-deferred basis, or a combination of the two. The Company contributes an amount to the Common Stock Fund equal to 50 percent of the first 6 percent of each participant's contribution. Participant rollover contributions are permitted provided all Plan and legal requirements are satisfied. -4- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN (CONTINUED) VESTING Participants are immediately vested in their employee contributions, the earnings attributable to those contributions, and the earnings attributable to employer contributions. Participants are vested with respect to employer matching contributions to the Plan at a rate of 25 percent after two years of service, 50 percent after three years of service, 75 percent after four years of service, and 100 percent after five years of service. Participants also become fully vested in employer contributions upon their death, attainment of age 65, retirement, total and permanent disability, permanent layoff, change in control, and/or Plan termination. FORFEITURES Participants who terminate employment before becoming fully vested forfeit the nonvested portion of their employer contributions. Amounts forfeited by Participants are used to reduce the contributions otherwise required by the Plan to be made by the Company to the Trustee. LOANS Participants may borrow from their Plan accounts. Loans are paid in the form of cash and may not exceed a Participant's vested account balance within specified legal limits. Loan interest rates are based on the prime rate plus one percent as determined on the first business day of the month preceding the month in which a Participant's written loan request is received by the Plan Administrator. Loan repayment terms vary from a minimum of six months to a maximum of five years. Repayment terms for loans used to purchase a participant's principal residence may be extended at the discretion of the Plan Administrator. Loan repayments are made regularly through payroll deductions or, for Participants not receiving a paycheck (e.g., on leave of absence), can be delivered regularly to the Plan Administrator. A Participant may prepay a one-time single sum of all of the outstanding loan balance. DISTRIBUTIONS Participants may withdraw all or a portion of vested contributions subject to certain conditions as specified in the Plan document. Upon retirement, Participants may elect to receive distribution of their accounts as a lump sum distribution or as an annuity ranging in life from two to ten years. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared on the accrual basis. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities, such as those regarding fair value. Actual results could differ from those estimates. -5- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) VALUATION OF ASSETS AND INCOME RECOGNITION Phelps Dodge and the former Cyprus Amax common stock is valued at fair market value based on the quoted market price. Participant loans are valued at cost, which approximates fair value. The remaining investments are valued at the net asset value of shares held by the Plan at year end. Transfers of assets into the Plan are made at fair market value. Assets transferred out of the Plan are reported at market value with the difference between cost and market reported as realized gains or losses. Purchase and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. PAYMENT OF BENEFITS Benefits are recorded when paid. RECLASSIFICATIONS Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. 3. INVESTMENTS INVESTMENT OPTIONS On December 22, 1999, the Plan was amended to permit the Plan to hold Phelps Dodge common stock. Participants may elect to invest their contributions to the Plan in Phelps Dodge common stock or a variety of T. Rowe Price funds. Effective December 2, 1999, all Company contributions are made in cash to be invested in Phelps Dodge common stock. Prior to December 2, 1999, Company contributions were made in cash to be invested in Cyprus Amax common stock. Shares of Phelps Dodge and formerly of Cyprus Amax common stock purchased by employer contributions may not be transferred or sold until properly withdrawn in accordance with Plan provisions to the extent that the participant's employer contribution account is vested. Upon distribution, these shares are unrestricted and may be freely traded. -6- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3. INVESTMENTS (CONTINUED) The following presents investments that represent 5 percent or more of the Plan's net assets at fair value. December 31, ------------------------ 1999 1998 ---------- ---------- Common Stock Fund Phelps Dodge Corporation common stock, 6,859 and 0 shares, respectively $ 462,148* $ -- Cyprus Amax Minerals Company common stock, 0 and 31,848 shares, respectively -- 318,887* T. Rowe Price Stable Value Fund, 1,129,972.07 and 947,135.34 shares, respectively 1,129,972 947,135 New Horizons Fund, 8,270.539 and 9,245.672 shares, respectively 227,688 215,794 Prime Reserve Fund, 265,384.27 and 28,431.57 shares, respectively 265,384 28,432 Equity Index Fund, 39,135.925 and 36,951.646 shares, respectively 1,548,218 1,233,446 Science and Technology Fund, 9,636.604 and 5,050.895 shares, respectively 613,948 190,267 Equity Income Fund, 12,667.425 and 12,902.152 shares, respectively 314,279 339,585 * Nonparticipant - directed -7- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3. INVESTMENTS (CONTINUED) During 1999, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $881,486 as follows: Mutual funds $488,866 Common stock 392,620 -------- $881,486 ======== 4. NONPARTICIPANT - DIRECTED INVESTMENTS Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant - directed investments is as follows: DECEMBER 31, --------------------- 1999 1998 --------- -------- Net assets: Common stock: Phelps Dodge $ -- $318,887 Cyprus Amax 462,148 -- --------- -------- $ 462,148 $318,887 ========= ======== Changes in net assets: Contributions $ 78,203 Dividends 11,043 Net appreciation 392,620 Loan repayments 748 Benefits paid to participants (39,636) Transfers, net (299,717) --------- $ 143,261 ========= 5. TAX STATUS Cyprus Amax received a favorable determination letter dated September 11, 1995, from the Internal Revenue Service as to the qualified status of the Plan. The Plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Accordingly, no provision for federal or state income taxes has been included in the Plan's financial statements. The Plan is now within its remedial amendment period for recent changes in applicable law (e.g., Small Business Job Protection Act of 1996, Taxpayer Relief Act of 1997, Retirement Protection Act of 1994 ("GATT"), and the Uniformed Services Employment and Reemployment Rights Act of 1994) and that it is anticipated that the Plan will be further amended to the extent necessary to comply with such laws and will be submitted on a timely basis to the IRS for a determination letter as to the Plan's continued tax qualified status. -8- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 6. DIFFERENCES BETWEEN FINANCIAL STATEMENTS AND FORM 5500 Gains (losses) on the sale of investments as reported in the statement of changes in net assets available for benefits have been determined on a participant level using the average cost method. For purposes of the Department of Labor's Form 5500, gains (losses) on such sales have been calculated based upon the market value at the beginning of the Plan year in accordance with the requirements of the Form 5500. In addition, in accordance with guidance issued by the American Institute of Certified Public Accountants, the Plan does not recognize as a liability amounts elected to be withdrawn but not yet distributed as of year end. However, such amounts must be included on the Form 5500. As of December 31, 1999 and 1998 the Plan had no benefits payable due to timing of the distributions by the Trustee. 7. TRANSACTIONS WITH PARTIES IN INTEREST Certain Plan investments are shares of mutual funds managed by T. Rowe Price. T. Rowe Price is the Plan trustee and recordkeeper as defined by the Plan. Therefore, these transactions qualify as party-in-interest. Phelps Dodge, as Plan sponsor, is also a party-in-interest. Investments include shares of Phelps Dodge common stock. Purchases of $400,695 and sales of $1,143 were made during 1999. Prior to October 16, 1999, Cyprus Amax was Plan sponsor and was therefore a party-in-interest. Investments included shares of Cyprus Amax common stock. Purchases of $80,039 and sales of $728,538 were made during 1999. The market value of the Phelps Dodge common stock was $67.375 per share as of December 31, 1999. The market value of the Cyprus Amax common stock was $10.00 per share as of December 31, 1998. 8. PLAN TERMINATION Although it has not expressed any intent to do so, Phelps Dodge has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, Participants would become 100 percent vested in their employer contributions. 9. SUBSEQUENT EVENTS Amax Metals Recovery ceased operations in January, 2000. As such, Phelps Dodge will be liquidating its interest in Amax Metals Recovery. However, the Participants in the Plan will be allowed to maintain their investments in the Plan and pay off any loans outstanding. Phelps Dodge currently does not intend to terminate the Plan. -9- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR DECEMBER 31, 1999 - --------------------------------------------------------------------------------
PARTY IN IDENTITY OF ISSUE, BORROWER CURRENT INTEREST LESSOR, OR SIMILAR PARTY DESCRIPTION OF INVESTMENT COST VALUE - -------- --------------------------- ------------------------- ----------- ----------- Yes Phelps Dodge Corporation Phelps Dodge Corporation common stock No par value $ 399,859 $ 462,148 Yes T. Rowe Price Prime Reserve Fund 265,384 265,384 Yes T. Rowe Price Equity Index Fund 891,084 1,548,217 Yes T. Rowe Price International Stock Fund 102,009 138,256 Yes T. Rowe Price Spectrum Income Fund 9,409 8,901 Yes T. Rowe Price Stable Value Fund 1,129,972 1,129,972 Yes T. Rowe Price New Horizons Fund 192,503 227,688 Yes T. Rowe Price Science & Technology Fund 409,389 613,948 Yes T. Rowe Price Equity Income Fund 310,781 314,279 Yes T. Rowe Price Spectrum Growth Fund 44,050 47,640 Yes Participant loans Interest rate 6% - 11.5%, with maturity dates through 2002 -- 199,209 ----------- $ 4,955,642 ===========
-10- CYPRUS AMAX MINERALS COMPANY THRIFT PLAN FOR BARGAINING UNIT EMPLOYEES SCHEDULE OF REPORTABLE TRANSACTIONS (a) FOR THE YEAR ENDED DECEMBER 31, 1999 - --------------------------------------------------------------------------------
NUMBER OF NUMBER OF PURCHASE SELLING LEASE ISSUER DESCRIPTION OF ASSETS PURCHASES SALES PRICE PRICE RENTAL ------ --------------------- --------- ----- ----- ----- ------ Single Transactions - ---------------------- T. Rowe Price Phelps Dodge Common Stock 1 $ 189,412 1 202,866 Cyprus Amax Common Stock 1 $ 418,717 1 202,866 Prime Reserve Fund 1 229,305 Series of Transactions - ---------------------- T. Rowe Price Phelps Dodge Common Stock 4 400,695 2 1,143 Cyprus Amax Common Stock 26 80,039 28 728,538 CURRENT EXPENSE VALUE OF INCURRED ASSET ON NET GAIN WITH COST OF TRANSACTION OR (LOSS) ISSUER DESCRIPTION OF ASSETS TRANSACTION ASSET DATE ON SALES ------ --------------------- ----------- ----- ---- -------- Single Transactions - ---------------------- T. Rowe Price Phelps Dodge Common Stock $ 189,412 $ 189,412 202,866 202,866 Cyprus Amax Common Stock 418,717 418,717 $ -- 202,866 202,866 -- Prime Reserve Fund 229,305 229,305 Series of Transactions - ---------------------- T. Rowe Price Phelps Dodge Common Stock 400,695 400,695 836 1,143 307 Cyprus Amax Common Stock 80,039 80,039 761,234 728,538 (32,696)
(a) Transactions or series or transactions in excess of 5 percent of the current value of the Plan's assets as of January 1, 1999 as defined in Section 2520.103-6 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under ERISA. -11- SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Committee has duly caused this Annual Report to be signed by the undersigned hereunto duly authorized. Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees Date: July 13, 2000 By: /s/ David L. Pulatie ------------------------------------ David L. Pulatie, Chairman Benefits Administration Committee EX-23 2 0002.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-61141) of Cyprus Amax Minerals Company of our report dated July 12, 2000, relating to the financial statements of the Cyprus Amax Minerals Company Thrift Plan for Bargaining Unit Employees, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP July 12, 2000 -----END PRIVACY-ENHANCED MESSAGE-----