FCX Freeport McMoRan Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 5, 2015

 

 

 

FREEPORT-McMoRan INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-11307-01		74-2480931
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

333 North Central Avenue Phoenix, AZ		85004-4414
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (602) 366-8100

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01

Entry into a Material Definitive Agreement.

On October 7, 2015, Freeport-McMoRan Inc. (the “Company”) entered into a Nomination and Standstill Agreement (the “Agreement”) with Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners Master Fund LP, Icahn Offshore LP, Icahn Partners LP, Icahn Onshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp., Andrew Langham and Courtney Mather (collectively, the “Icahn Group”), pursuant to which the Icahn Group agreed to certain standstill provisions and the Company agreed to appoint and nominate Andrew Langham and Courtney Mather (the “Icahn Designees”) to the Company’s Board of Directors (the “Board”). The following is a summary of the terms of the Agreement and the related Confidentiality Agreement entered into by the Company and each member of the Icahn Group on October 7, 2015 (the “Confidentiality Agreement”). The summary does not purport to be complete and is qualified in its entirety by reference to the Agreement and the Confidentiality Agreement, copies of which are attached as Exhibits 10.1 and 10.2 and are incorporated herein by reference.

Under the terms of the Agreement, the Icahn Group has agreed to certain standstill restrictions during the Standstill Period (as defined under the Agreement), including restrictions on the Icahn Group (1) soliciting or granting proxies to vote shares of the Company’s common stock, (2) initiating stockholder proposals for consideration by the Company’s stockholders, (3) nominating directors for election to the Board, (4) seeking the removal of any member of the Board, and (5) submitting proposals for or offers of certain extraordinary transactions involving the Company, in each case, subject to certain exceptions. The Agreement generally defines the “Standstill Period” as the period beginning on the date the Icahn Designees are appointed to the Board until 35 days after the date each Icahn Designee is no longer on the Board (or provides notice of his intention to resign). In addition, during the Standstill Period, at all annual or special meetings of stockholders through the Company’s 2016 annual meeting of stockholders (the “2016 Annual Meeting”) and as long as any Icahn Nominee is either appointed by the Board or will otherwise continue to be on the Board after any such meeting, the Icahn Group has agreed to vote all of its shares of the Company’s common stock (1) in favor of the election of all directors nominated by the Board, (2) against any directors proposed that are not nominated by the Board and against any proposals not recommended by the Board relating to removing any directors of the Board or otherwise changing the composition of the Board, and (3) in favor of the ratification of the appointment of the Company’s auditors.

Pursuant to the terms of the Agreement, the Company agreed to increase the size of its Board from 9 to 11 members and appoint the Icahn Designees to the Board effective immediately. Mr. Langham will be appointed to each of the Compensation Committee and Nominating and Corporate Governance Committee, and Mr. Mather will be appointed to each of the Audit Committee and Executive Committee. In addition, the Company has agreed to include the Icahn Designees in its slate of nominees for election to the Board at the 2016 Annual Meeting and use its reasonable best efforts to cause their election, including recommending that the Company’s stockholders vote in favor of the Icahn Designees. Pursuant to the terms of the Agreement, as long as an Icahn Designee is a member of the Board, the Board will not be expanded to more than 11 members. The Company also agreed that, during the Standstill Period, promptly after notice from the Icahn Group, it shall appoint one individual designated by the Icahn Group to the Board of Directors of Freeport-McMoRan Oil & Gas Inc., the Company’s wholly-owned oil and gas subsidiary.

The Company also agreed that on or prior to December 31, 2015, the Company will amend its by-laws to provide that stockholders of the Company may provide timely notice of director nominations and other business to be presented at the 2016 Annual Meeting no earlier than 90 days and no later than 60 days prior to the anniversary of the date of the Company’s 2015 annual meeting of stockholders, and that if such action is not taken prior to December 31, 2015, the Standstill Period will terminate. In addition, during the Standstill Period, the Company agreed not to implement a stockholder rights plan with a triggering threshold less than 20% and to grant the Icahn Group any waiver or approval it grants another person with respect to any rights plan implemented by the Company or the application of Section 203 of the Delaware General Corporation Law.

If at any time the Icahn Group and its controlled affiliates cease to beneficially own a “net long position” (as defined in the Agreement) of at least (1) 60 million shares of the Company’s common stock, the Icahn Group will cause one Icahn Designee to resign from the Board and the Company will only be required to include one Icahn Designee in its slate of nominees for the 2016 Annual Meeting and (2) 40 million

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shares of the Company’s common stock or if the Icahn Group materially breaches the Agreement, the Icahn Group will cause both Icahn Designees to resign from the Board and the Company will not be required to include either Icahn Designee in its slate of nominees for the 2016 Annual Meeting.

In connection with the Agreement, the Company and each member of the Icahn Group have also entered into the Confidentiality Agreement in respect of any information provided to the Icahn Group or its representatives by the Icahn Designees or the Company.

The Company issued a press release dated October 7, 2015, announcing the appointment of the Icahn Designees to the Board pursuant to the Agreement, a copy of which is attached hereto as Exhibit 99.2.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective as of the close of business on October 5, 2015, H. Devon Graham, Jr. and Bobby Lee Lackey retired from the Board and James C. Flores resigned from the Board. Also effective October 5, 2015, Robert J. Allison, Jr., Alan R. Buckwalter, III, Thomas A. Fry, III and Charles C. Krulak retired from the Board and were appointed to the Board of Directors of FCX Oil & Gas Inc., the Company’s wholly-owned oil and gas subsidiary. In addition, the Board approved the dissolution of the Office of the Chairman management structure.

As a result of the retirements and resignation from the Board, the size of the Board was reduced from 16 to 9 members. The continuing members of the Company’s Board are James R. Moffett, Richard C. Adkerson, Gerald J. Ford, Robert A. Day, Lydia H. Kennard, Jon C. Madonna, Dustan E. McCoy, Stephen H. Siegele and Frances Fragos Townsend. The Company issued a press release dated October 6, 2015, announcing the new Board structure, a copy of which is attached hereto as Exhibit 99.1.

In addition, on October 7, 2015, pursuant to the Agreement described in Item 1.01 of this Current Report on Form 8-K, the Company agreed to increase the size of its Board from 9 to 11 members and agreed to appoint the Icahn Designees to the Company’s Board effective immediately. Mr. Langham will be appointed to the Compensation Committee and the Nominating and Corporate Governance Committee, and Mr. Mather will be appointed to the Audit Committee and the Executive Committee. The Company issued a press release dated October 7, 2015, announcing the appointment of two new directors pursuant to the Agreement described in Item 1.01 of this Current Report on Form 8-K, a copy of which is attached hereto as Exhibit 99.2.

The Icahn Designees will be eligible to receive the same compensation and indemnification as the Company’s other non-management directors as described in the Company’s Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 27, 2015.

There are no transactions between Mr. Langham and the Company or between Mr. Mather and the Company that would be reportable under Item 404(a) of Regulation S-K.

The Board is in the process of reviewing the composition of the Board committees.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

The Exhibits included as part of this Current Report are listed in the attached Exhibit Index.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 7, 2015

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Freeport-McMoRan Inc.

Exhibit Index

 

Exhibit Number
10.1		Nomination and Standstill Agreement dated October 7, 2015, by and between Freeport-McMoRan Inc., Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners Master Fund LP, Icahn Offshore LP, Icahn Partners LP, Icahn Onshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp., Andrew Langham and Courtney Mather.
10.2		Confidentiality Agreement dated October 7, 2015, by and between Freeport-McMoRan Inc., Carl C. Icahn, High River Limited Partnership, Hopper Investments LLC, Barberry Corp., Icahn Partners Master Fund LP, Icahn Offshore LP, Icahn Partners LP, Icahn Onshore LP, Icahn Capital LP, IPH GP LLC, Icahn Enterprises Holdings L.P., Icahn Enterprises G.P. Inc., Beckton Corp., Andrew Langham and Courtney Mather.
99.1		Press release dated October 6, 2015, titled “Freeport-McMoRan Inc. Announces New Board Structure & Review of Strategic Alternatives for its Oil & Gas Business.”
99.2		Press release dated October 7, 2015, titled “Freeport-McMoRan Inc. Appoints Two New Directors.”

Exhibit 10.1

EXECUTION VERSION

NOMINATION AND STANDSTILL AGREEMENT

This Nomination and Standstill Agreement, dated October 7, 2015 (this “Agreement”), is by and among the persons and entities listed on Schedule A hereto (collectively, the “Icahn Group”, and individually a “member” of the Icahn Group) and Freeport-McMoRan Inc. (the “Company”).

In consideration of and reliance upon the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.	Board Matters.

(a) No later than the next meeting of the Board of Directors of the Company (the “Board”) immediately following the date hereof (for avoidance of doubt, such meeting to be held no later than October 13, 2015), the Board shall take action to increase the size of the Board by two members and to appoint Andrew Langham and Courtney Mather (the “Icahn Nominees”) to fill the vacancies so created (the date of such appointment, the “Board Appointment Date”); provided that as a condition to the Icahn Nominees’ appointment to the Board and inclusion in the Company’s director slate for the 2016 Annual Meeting, the Icahn Group, including each Icahn Nominee, agrees to provide to the Company, prior to nomination and appointment and on an ongoing basis while such Icahn Nominee is serving as a member of the Board, such information and materials as the Company routinely receives from other members of the Board or as is required to be disclosed in proxy statements under applicable law or as is otherwise reasonably requested by the Company from time to time from members of the Board in connection with the Company’s legal, regulatory, auditor or stock exchange requirements, completed D&O Questionnaires in the form separately provided to the Icahn Group, consents to be named in the Company’s proxy statement and to serve on the Board if elected, and, as contemplated by Section 7 of this Agreement, executed irrevocable resignations as director in the form attached hereto as Exhibit B (the “Nomination Documents”).

(b) The Company represents that currently the only Board committees are: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, the Corporate Responsibility Committee, the Dividend Committee and the Executive Committee. During the Standstill Period, so long as an Icahn Nominee is a member of the Board: (1) the Board will cause at least one of the Icahn Nominees to be a member of the Executive Committee if such a committee exists (or any other committee of the Board that may be formed after the date hereof with functions similar to those customarily granted to an executive committee) and, if the Executive Committee (or any other such similar committee) has more than 5 members (excluding any Icahn Nominee) then both of the Icahn Nominees shall be appointed members thereof); and (2) all Board consideration of, and voting with respect to, Extraordinary Transactions and appointment and employment of executive officers, will take place only at the full Board level or in committees of which one of the Icahn Nominees is a member (if the applicable committee has more than 5 members (excluding any Icahn Nominee) then both of the Icahn Nominees shall be appointed members thereof). Concurrently with their

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appointments to the Board, Andrew Langham will be appointed to the Compensation Committee and the Nominating and Governance Committee of the Board, and Courtney Mather will be appointed to the Audit Committee and the Executive Committee of the Board; provided that any member of the Audit Committee, Nominating and Governance Committee or Compensation Committee will be independent as defined in accordance with the rules of the New York Stock Exchange or any other stock exchange on which the Common Stock is listed (and the Company acknowledges that the Icahn Group has represented that both Nominees are independent as of the date hereof). During the Standstill Period, each Icahn Nominee will have the same right as other members of the Board to be invited to attend, as an observer and without voting rights, meetings of committees of the Board of which such Icahn Nominee is not a member.

“Extraordinary Transaction” means any of the following involving the Company or any of its material subsidiaries or its or their securities or a material amount of the assets or businesses of the Company or any of its material subsidiaries: any tender offer or exchange offer, rights offering, spin-off, public offering of securities, merger, acquisition, business combination, reorganization, restructuring, recapitalization, sale or acquisition of material assets, liquidation or dissolution.

(c) Upon becoming a member of the Board, during the Standstill Period, each Icahn Nominee shall have the same rights (including for the avoidance of doubt with respect to consideration for committee appointments) and duties as any other Board member. At all times from the date of this Agreement through his termination of service as a member of the Board, each Icahn Nominee shall comply with all written policies, procedures, processes, codes, rules, standards and guidelines applicable to Board members (and of which such Icahn Nominee has been provided written copies in advance (or which have been filed with the Securities and Exchange Commission (the “SEC”) or posted on the Company’s website)), including but not limited to the Company’s corporate governance guidelines, principles of business conduct, director stock ownership guidelines and insider trading policy and preserve the confidentiality of Company business and information, including discussions or matters considered in meetings of the Board or Board committees, subject to the Confidentiality Agreement (as defined in Section 2). For the avoidance of doubt, without limiting the applicability of relevant laws, the Company agrees that such policies, procedures, processes, codes, rules, standards and guidelines shall not be applicable to, or deemed to apply or extend to, the members of the Icahn Group (other than their application to the Icahn Nominees), except to the extent applicable as expressly set forth therein as of the date hereof.

(d) Subject to the clause 1(e), during the Standstill Period, the Company and the Icahn Group agree to include each Icahn Nominee in the Company’s slate of directors for the 2016 Annual Meeting, and the Company shall use reasonable best efforts to cause each Icahn Nominee to be elected (including recommending that the Company’s stockholders vote in favor of the election of the Icahn Nominees, including the Icahn Nominees in the Company’s proxy statement and proxy card for such annual meeting and otherwise supporting the Icahn Nominees for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees in the aggregate) (collectively, the “Election Support Efforts”), and the Icahn Group agrees not to conduct a

 

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proxy contest regarding any matter, including the election of directors, with respect to the 2016 Annual Meeting.

(e) Provided the Company has any obligation to include Icahn Nominees on its slate pursuant to the preceding clause (d), (i) the Company shall be required to include only one Icahn Nominee on the slate for the 2016 Annual Meeting if at any time after the date of this Agreement, the Icahn Group, together with all controlled Affiliates of the members of the Icahn Group (such controlled Affiliates, collectively and individually, the “Icahn Affiliates”), ceases collectively to beneficially own (as defined in Rule 13d-3 promulgated by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), an aggregate Net Long Position in at least sixty percent (60%) of the number of Voting Securities set forth in Section 6(b) but continues to own at least forty percent (40%) of the number of Voting Securities set forth in Section 6(b) (in each case, as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) of the shares of Common Stock of the Company outstanding as of such time and (ii) the Company shall be not be required to include any Icahn Nominee on the slate for the 2016 Annual Meeting if at any time after the date of this Agreement, the Icahn Group, together with the Icahn Affiliates, ceases collectively to beneficially own (as defined in Rule 13d-3 promulgated by the SEC under the Exchange Act), an aggregate Net Long Position in at least forty percent (40%) of the number of Voting Securities set forth in Section 6(b) (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like) of the shares of Common Stock of the Company outstanding as of such time.

(f) The Company shall not be obligated to include the Icahn Nominees on the slate of directors proposed for election at the Company’s annual meeting of stockholders for any meeting other than the 2016 Annual Meeting pursuant to this Agreement. For any annual meeting of stockholders subsequent to the 2016 Annual Meeting during the Standstill Period, as long as any Icahn Nominee is on the Board, the Company shall notify the Icahn Group in writing no less than forty-five (45) calendar days before the last day of the advance notice deadline set forth in the Company’s by-laws if such Icahn Nominee will be nominated by the Company for election as a director at such annual meeting and, if such Icahn Nominee is to be so nominated, shall use reasonable best efforts to cause the election of such Icahn Nominee so nominated by the Company (including the Election Support Efforts).

(g) During the Standstill Period, should an Icahn Nominee resign from the Board or be rendered unable to, or refuse to, be appointed to, or for any other reason fail to serve or be not serving on, the Board (other than as a result of not being nominated by the Company for an annual meeting of stockholders subsequent to the 2016 Annual Meeting), as long as the Icahn Group has not materially breached this Agreement and failed to cure such breach within five business days of written notice from the Company specifying any such breach, the Icahn Group shall be entitled to designate privately, and the Company shall cause to be added as a member of the Board, a replacement approved by the Company (such approval not to be unreasonably withheld or delayed) and who qualifies as an independent director (an “Acceptable Person”) (and if such proposed designee is not an Acceptable Person, the Icahn Group shall be entitled to continue designating a recommended replacement until such proposed designee is an Acceptable Person) (a “Replacement”). Any such

 

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Replacement who becomes a Board member in replacement of any Icahn Nominee shall be deemed to be an Icahn Nominee for all purposes under this Agreement, and prior to his or her appointment to the Board, shall be required to provide to the Company the Nomination Documents, including an irrevocable resignation as director in the form attached hereto as Exhibit B.

(h) To the extent permitted by law and the Company’s existing insurance coverage, from and after the Board Appointment Date, during the Standstill Period, the Icahn Nominees shall be covered by the same indemnification and insurance provisions and coverage as are applicable to the individuals that are currently directors of the Company.

(i) The Company agrees that on or prior to December 31, 2015, it shall amend its by-laws to provide that stockholders of the Company may provide timely notice of director nominations and other business to be presented at the 2016 Annual Meeting no earlier than 90 days and no later than 60 days prior to the anniversary of the date of the 2015 Annual Meeting. The Company agrees that any failure by the Company to comply with the preceding sentence prior to December 31, 2015 shall be deemed to terminate the Standstill Period.

(j) The Company agrees that, during the Standstill Period, promptly after notice from the Icahn Group, it shall appoint one individual designated by the Icahn Group to the FCX Oil & Gas Inc. Board of Directors which individual (a) qualifies as an independent director, (b) is not the same individual as any of the Icahn Nominees and (c) is reasonably acceptable to the Company (provided if such individual is not reasonably acceptable to the Company or if such individual resigns, retires or is removed for any reason, the Icahn Group shall be entitled to continue designating recommended replacements until a proposed designee is appointed to the FCX Oil & Gas Inc. Board of Directors). To the extent permitted by law, such individual will be treated as all other non-management directors of FCX Oil & Gas Inc., including with respect to compensation, committee membership, insurance coverage, indemnification and expense reimbursement.

 

2.

Information. It is understood that the Icahn Group may receive certain non-public information concerning the Company. If the Icahn Group receives any such information, it agrees to hold such information subject to and in accordance with the terms of the Confidentiality Agreement dated October 7, 2015, which shall remain in place in accordance with its terms (the “Confidentiality Agreement”). As long as any Icahn Nominee is on the Board and the Icahn Group has not materially breached this Agreement and failed to cure such breach within five business days of written notice from the Company specifying any such breach, the Board shall not adopt a policy precluding members of the Board, including the Icahn Nominees, from speaking to Mr. Icahn, and the Company confirms that it will advise members of the Board, including the Icahn Nominees, that they may, but are not obligated to, speak to Mr. Icahn (but subject to the Confidentiality Agreement), if they are willing to do so.

 

3.	Standstill. Subject to Section 1(i), from and including the Board Appointment Date until thirty-five (35) days after the date that no Icahn Nominee (including for the avoidance of doubt any Replacement) serves on the Board (it being understood that if each Icahn

 

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Nominee then serving on the Board gives the Company at least thirty-five (35) days advance written notice of his intent to resign as a director prior to resigning, then the foregoing clause shall refer to the date that no Icahn Nominee (including for the avoidance of doubt any Replacement) serves on the Board rather than thirty-five (35) days after such date; it being further understood that if the applicable Icahn Nominee is no longer a member of the Board due to circumstances in which the Icahn Group would be entitled to appoint a Replacement, such Icahn Nominee shall be deemed to continue to be a member of the Board for all purposes of this Agreement until such time as the Icahn Group irrevocably waives in writing any right to either designate such a Replacement or appoint such a Replacement) (such period, the “Standstill Period”), so long as the Company has not materially breached this Agreement and failed to cure such breach within five (5) business days of written notice from any member of the Icahn Group specifying such breach, no member of the Icahn Group shall, directly or indirectly, and each member of the Icahn Group shall cause each of the Icahn Affiliates not to, directly or indirectly, with respect to the Company and its controlled affiliates which are not publicly traded entities (it being understood that the foregoing shall not restrict the Icahn Nominees from discussing such matters addressed below privately with other members of the Board solely in their capacity as a director in a manner consistent with the Icahn Nominees’ fiduciary duties to the Company):

 

(i)

solicit proxies or written consents of stockholders or conduct any other type of referendum (binding or non-binding) with respect to, or from the holders of, the voting securities of the Company (“Voting Securities”), or become a “participant” (as such term is defined in Instruction 3 to Item 4 of Schedule 14A promulgated under the Exchange Act) in or assist any third party in any “solicitation” of any proxy, consent or other authority (as such terms are defined under the Exchange Act) to vote or withhold from voting any Voting Securities (other than such encouragement, advice or influence that is consistent with Company management’s recommendation in connection with such matter);

 

(ii)

encourage, advise or influence any other person or assist any third party in so encouraging, assisting or influencing any person with respect to the giving or withholding of any proxy, consent or other authority to vote or in conducting any type of referendum (other than such encouragement, advice or influence that is consistent with Company management’s recommendation in connection with such matter);

 

(iii)

form or join in a partnership, limited partnership, syndicate or a “group” as defined under Section 13(d) of the Exchange Act, with respect to the Voting Securities, or otherwise support or participate in any effort by a third party with respect to the matters set forth in this Section 3;

 

(iv)

present (or request to present) at any annual meeting or any special meeting of the Company’s stockholders, any proposal for consideration for action by stockholders or propose (or request to propose) any nominee for election to the Board or seek representation on the Board or the removal of any

 

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member of the Board, or encourage, advise or influence any other person or assist any third party in so doing;

 

(v)

grant any proxy, consent or other authority to vote with respect to any matters (other than to the named proxies included in the Company’s proxy card for any annual meeting or special meeting of stockholders) or deposit any Voting Securities in a voting trust or subject them to a voting agreement or other arrangement of similar effect (excluding customary brokerage accounts, margin accounts, prime brokerage accounts and the like), in each case, except as provided in Section 4 below;

 

(vi)

call or seek to call any special meeting of the Company or make any request under Section 220 of the Delaware General Corporation Law (“DGCL”) or other applicable legal provisions regarding inspection of books and records or other materials (including stocklist materials) of the Company or any of its subsidiaries;

 

(vii)

institute, solicit, assist or join, as a party, any litigation, arbitration or other proceeding against or involving the Company or any of its current or former directors or officers (including derivative actions) other than to enforce the provisions of this Agreement;

 

(viii)

without the prior approval of the Board, separately or in conjunction with any other person or entity in which it is or proposes to be either a principal, partner or financing source or is acting or proposes to act as broker or agent for compensation, propose (publicly or to the Company) or participate in, effect or seek to effect, any Extraordinary Transaction; provided that the members of the Icahn Group shall be permitted to sell or tender their Voting Securities, and otherwise receive consideration, pursuant to any Extraordinary Transaction and provided further that if a third party (not a party to this Agreement or an affiliate of a party) commences an unsolicited tender offer or exchange offer for all of the outstanding Voting Securities that is not recommended by the Board, then the Icahn Group shall similarly be permitted to commence a tender offer or exchange offer for all of the outstanding Voting Securities at the same or higher consideration per share; or

 

(ix)

request, directly or indirectly, any amendment or waiver of the foregoing in a manner that would reasonably likely require public disclosure by the Icahn Group or the Company.

From the date of this Agreement until the end of the Standstill Period, (1) the Icahn Group shall not directly or indirectly make, or cause to be made, by press release or similar public statement to the press or media (including social media), or in an SEC or other public filing or otherwise, any statement or announcement that disparages (as distinct from objective statements reflecting business criticism of the Company or its affiliates but not of individual officers or directors of the Company or its affiliates) the Company or its

 

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affiliates or any of their respective officers or directors with respect to matters relating to their service at the Company or its affiliates (including any former officers or directors); and (2) neither the Company nor any of its officers or directors shall directly or indirectly make, or cause to be made, by press release or similar public statement to the press or media (including social media), or in an SEC or other public filing, any statement or announcement that disparages (as distinct from objective statements reflecting business criticism of the Icahn Group or its affiliates but not of individual officers or directors of the Icahn Group or its affiliates) any member of the Icahn Group or any of its officers or directors with respect to matters relating to the Company or its affiliates. For the avoidance of doubt, the foregoing restrictions shall not be deemed to apply to advisors of the Icahn Group or of the Company who are not, directly or indirectly, acting at the behest of, or for the benefit of, such party.

From the date of this Agreement until the end of the Standstill Period, (1) the Icahn Group shall not permit any of its controlled Affiliates to do any of the items in this Section 3 that the Icahn Group is restricted from doing and shall not publicly encourage or support any other person to take any of the actions described in this Section 3 that the Icahn Group is restricted from doing and (2) the Company shall not permit any of its controlled Affiliates to do any of the items in this Section 3 that the Company is restricted from doing and shall not publicly encourage or support any other person to take any of the actions described in this Section 3 that the Company is restricted from doing.

 

4.

Voting Commitment. Unless the Company has materially breached this Agreement and failed to cure within five business days following receipt of written notice from the Icahn Group, during the Standstill Period, each member of the Icahn Group shall (1) cause, in the case of all Voting Securities owned of record, and (2) instruct the record owner, in the case of all shares of Voting Securities Beneficially Owned but not owned of record, directly or indirectly, by it, or by any Icahn Affiliate, in each case as of the record date for any annual meeting of stockholders or any special meeting of stockholders of the Company within the Standstill Period, in each case that are entitled to vote at any such annual or special meeting, to be present for quorum purposes and to be voted, at all such annual or special meetings or at any adjournments or postponements thereof (through the 2016 Annual Meeting and for so long thereafter as any Icahn Nominee is either appointed by the Board or will otherwise continue to be on the Board after any such meeting), (i) for all directors nominated by the Board for election at such annual or special meeting, (ii) against any directors proposed that are not nominated by the Board for election at such annual or special meeting and against any proposals not recommended by the Board relating to removing any directors of the Board or otherwise changing the composition of the Board, and (iii) in accordance with the recommendation of the Board for the ratification of the appointment of the Company’s independent registered public accounting firm. Except as provided in the foregoing sentence, the Icahn Group shall not be restricted from voting “For”, “Against” or “Abstaining” from any other proposals at any annual or special meeting of the Company.

 

5.	Public Announcements. No earlier than 8:00 a.m., New York City time, on the date hereof, the Company and the Icahn Group shall each announce this Agreement and the material terms hereof by means of press releases in the respective forms attached hereto as Exhibit

 

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A-1 and A-2 (the “Press Releases”). Neither the Company nor the Icahn Group shall make any public announcement or statement that contradicts or disagrees with the statements made in the Press Releases, except as required by law or the rules of any stock exchange or with the prior written consent of the other party. The Company acknowledges that the Icahn Group intends to file this Agreement and the Press Releases (if any) as an exhibit to its Schedule 13D pursuant to an amendment.

 

6.	Representations and Warranties of All Parties; Representations and Warranties of the Icahn Group; Representations, Warranties and Covenants of the Company.

(a) Each of the parties represents and warrants to the other party that: (i) such party has all requisite company power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (ii) this Agreement has been duly and validly authorized, executed and delivered by it and is a valid and binding obligation of such party, enforceable against such party in accordance with its terms; (iii) this Agreement will not result in a violation of any terms or conditions of any agreements to which such person is a party or by which such party may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting such party; and (iv) there is currently no pending or outstanding litigation between the Icahn Group and the Company or affiliates thereof.

(b) Each member of the Icahn Group jointly represents and warrants that, as of the date of this Agreement, (i) the Icahn Group collectively Beneficially Own, an aggregate of 100,000,000 shares of Common Stock, par value $0.10, of the Company (“Common Stock”); (ii) except for such ownership, no member of the Icahn Group, individually or in the aggregate with all other members of the Icahn Group and Icahn Affiliates, has any other Beneficial Ownership of, and/or economic exposure to, any Voting Securities, including through any derivative transaction described in the definition of “Beneficial Ownership” above; (iii) the Icahn Group, collectively with the Icahn Affiliates, have a Net Long Position of 100,000,000 shares of Common Stock and (iv) the members of the Icahn Group are the only controlled Affiliates of any member of the Icahn Group that Beneficially Own any shares of Common Stock. As used in this Agreement, the term “Beneficial Ownership” of “Voting Securities” means ownership of: (i) Voting Securities, (ii) rights or options to own or acquire any Voting Securities (whether such right or option is exercisable immediately or only after the passage of time or upon the satisfaction of one or more conditions (whether or not within the control of such person), compliance with regulatory requirements or otherwise) and (iii) any other economic exposure to Voting Securities, including through any derivative transaction that gives any such person or any of such person’s controlled Affiliates the economic equivalent of ownership of an amount of Voting Securities due to the fact that the value of the derivative is explicitly determined by reference to the price or value of Voting Securities, or which provides such person or any of such person’s controlled Affiliates an opportunity, directly or indirectly, to profit, or to share in any profit, derived from any increase in the value of Voting Securities, in any case without regard to whether (x) such derivative conveys any voting rights in Voting Securities to such person or any of such person’s Affiliates, (y) the derivative is required to be, or capable of being, settled through delivery of Voting Securities, or (z) such person or any of such person’s Affiliates may have entered into other transactions that hedge the

 

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economic effect of such Beneficial Ownership of Voting Securities. For purposes of this Section, no Person shall be, or be deemed to be, the “Beneficial Owner” of, or to “beneficially own,” any securities beneficially owned by any director of the Company to the extent such securities were acquired directly from the Company by such director as or pursuant to director compensation for serving as a director of the Company.

(c) The Company represents that there are currently nine members of the Board and, so long as an Icahn Nominee is a member of the Board during the Standstill Period, neither the Company nor the Board shall take any action to, or support any person who is seeking to, increase the size of the Board above eleven directors.(d) During the Standstill Period, so long as the Icahn Group has not materially breached this Agreement and failed to cure such breach within five business days of written notice from the Company specifying any such breach, any Rights Plan adopted by the Company shall (A) not have a triggering “Acquiring Person” ownership threshold below 20% of the then-outstanding shares of Common Stock, and (B) automatically expire if not ratified by stockholders of the Company within one hundred thirty-five (135) days of taking effect. In addition, during the Standstill Period, so long as the Icahn Group has not materially breached this Agreement and failed to cure such breach within five business days of written notice from the Company specifying any such breach, in the event that the Company adopts a Rights Plan with a triggering “Acquiring Person” ownership threshold above 20% of the then-outstanding shares of Common Stock and permits any other person or group required to file on Schedule 13D to buy or own pursuant to the terms of, or as a result of being waived through, such Rights Plan an amount higher than the triggering “Acquiring Person” ownership threshold in such Rights Plan, then the Company shall similarly permit the Icahn Group to buy or own such higher amount pursuant to the terms of, or as a result of being waived through, such Rights Plan. A “Rights Plan” means any plan or arrangement of the sort commonly referred to as a “rights plan” or “stockholder rights plan” or “shareholder rights plan” or “poison pill” that is designed to increase the cost to a potential acquirer of exceeding the applicable ownership thresholds through the issuance of new rights, common stock or preferred shares (or any other security or device that may be issued to stockholders of the Company other than ratably to all stockholders of the Company) that carry severe redemption provisions, favorable purchase provisions or otherwise, and any related rights agreement.

(d) During the Standstill Period, so long as the Icahn Group has not materially breached this Agreement and failed to cure such breach within five business days of written notice from the Company specifying any such breach, in the event that the Board approves the acquisition or ownership of any shares of Common Stock by any other person or group required to file on Schedule 13D in order to except such acquisition or ownership from the application of Section 203 of the Delaware General Corporation Law (“Section 203”), the Company agrees that it will grant similar approval to the Icahn Group under Section 203.

 

7.

Resignation. Any provision in this Agreement to the contrary notwithstanding, (i) if at any time after the date of this Agreement, the Icahn Group, together with all the Icahn Affiliates, ceases collectively to beneficially own (as defined in Rule 13d-3 promulgated by the SEC under the Exchange Act), an aggregate Net Long Position in at least

 

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60,000,000 shares of Common Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like), the Icahn Group shall cause at least one Icahn Nominee to promptly tender his resignation from the Board and any committee of the Board on which such Icahn Nominee then sits and (ii) if at any time after the date of this Agreement, the Icahn Group, together with all the Icahn Affiliates, ceases collectively to beneficially own (as defined in Rule 13d-3 promulgated by the SEC under the Exchange Act), an aggregate Net Long Position in at least 40,000,000 shares of Common Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like), or the Icahn Group materially breaches this Agreement or the Confidentiality Agreement and fails to cure such breach within five business days of written notice from the Company specifying any such breach, (1) the Icahn Group shall cause each Icahn Nominee to promptly tender his resignation from the Board and any committee of the Board on which such Icahn Nominee then sits and (2) neither the Company nor any member of the Icahn Group shall have any further obligations under this Agreement. In furtherance of the immediately preceding sentence, each Icahn Nominee shall, concurrently with the execution of this Agreement, and each member of the Icahn Group shall cause each Icahn Nominee to, execute an irrevocable resignation as director in the form attached hereto as Exhibit B and deliver it to the Company. The Icahn Group shall keep the Company regularly apprised of the Net Long Position of the Icahn Group and the Icahn Affiliates. For purposes of this Agreement: the term “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated by the SEC under the Exchange Act and the term “Net Long Position” shall mean: such shares of Common Stock beneficially owned, directly or indirectly, that constitute such person’s net long position as defined in Rule 14e-4 under the Exchange Act mutatis mutandis, provided that “Net Long Position” shall not include any shares as to which such person does not have the right to vote or direct the vote or as to which such person has entered into a derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares.

 

8.

Remedies; Forum and Governing Law. The parties hereto recognize and agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy. Accordingly, each party agrees that in addition to other remedies the other party shall be entitled to at law or equity, the other party shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in the Court of Chancery or other federal or state courts of the State of Delaware. In the event that any action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law. Furthermore, each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the Court of Chancery or other federal or state courts of the State of Delaware in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the Court of Chancery or other federal or state courts of the State of Delaware, and each of the parties

 

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irrevocably waives the right to trial by jury, (d) agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief and (e) irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such party’s principal place of business or as otherwise provided by applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

 

9.

No Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

10.	Entire Agreement; Prior Agreement. This Agreement and the Confidentiality Agreement contain the entire understanding of the parties with respect to the subject matter hereof and may be amended only by an agreement in writing executed by the parties hereto.

 

11.

Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by both telecopy and electronic mail, when such telecopy and electronic mail is transmitted to the telecopy number set forth below and the appropriate confirmation is received and sent to the electronic mail address set forth below or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:

If to the Company:

Freeport-McMoRan Inc.

333 North Central Avenue

Phoenix, Arizona 85004-2189

Facsimile: 602-366-7691

Email: Rick_McMillan@fmi.com

 Douglas_Currault@fmi.com

Attention: General Counsel

  Deputy General Counsel and Corporate Secretary

With a copy to (which shall not constitute notice):

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

 

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Facsimile: 212-403-2000

Email: DEShapiro@wlrk.com

 JELevine@wlrk.com

Attention:         David E. Shapiro

  Jenna E. Levine

If to the Icahn Group:

Icahn Associates Holdings LLC

767 Fifth Avenue, 47^th Floor

New York, NY 10153

Facsimile: 212-750-5807

Email: KCozza@sfire.com

Attention:         Keith Cozza

With a copy to (which shall not constitute notice):

Icahn Associates Holdings LLC

767 Fifth Avenue, 47^th Floor

New York, NY 10153

Facsimile: 917-591-3310 (Mr. Lynn)

212-688-1158 (Mr. Pastor)

Email: JLynn@sfire.com

 LPastor@sfire.com

Attention:        Jesse Lynn

Louie Pastor

 

12.

Severability. If at any time subsequent to the date hereof, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.

 

13.	Counterparts. This Agreement may be executed in two or more counterparts (including by facsimile or PDF) which together shall constitute a single agreement.

 

14.	Successors and Assigns. This Agreement shall not be assignable or assigned, directly or indirectly, by operation of law or otherwise, by any of the parties to this Agreement.

 

15.	No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons.

 

16.	Fees and Expenses. Neither the Company, on the one hand, nor the Icahn Group, on the other hand, will be responsible for any fees or expenses of the other in connection with this

 

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Agreement.

 

17.

Interpretation and Construction. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. The term “including” shall be deemed to mean “including without limitation” in all instances and all pronouns shall be deemed to include the corresponding masculine, feminine or neuter forms.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.

 

 

[Signature Page to Agreement between the Icahn Group and Freeport-McMoRan Inc.]

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Accepted and agreed as of the date first written above:

 

 

[Signature Page to Agreement between the Icahn Group and Freeport-McMoRan Inc.]

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[Signature Page to Agreement between the Icahn Group and Freeport-McMoRan Inc.]

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[Signature Page to Agreement between the Icahn Group and Freeport-McMoRan Inc.]

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SCHEDULE A

CARL C. ICAHN

HIGH RIVER LIMITED PARTNERSHIP

HOPPER INVESTMENTS LLC

BARBERRY CORP.

ICAHN PARTNERS LP

ICAHN PARTNERS MASTER FUND LP

ICAHN ENTERPRISES G.P. INC.

ICAHN ENTERPRISES HOLDINGS L.P.

IPH GP LLC

ICAHN CAPITAL LP

ICAHN ONSHORE LP

ICAHN OFFSHORE LP

BECKTON CORP.

ANDREW LANGHAM

COURTNEY MATHER

 

Schedule A

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EXHIBIT A-1

[COMPANY PRESS RELEASE]

 

Exhibit A-1

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EXHIBIT A-2

[ICAHN PRESS RELEASE]

 

Exhibit A-2

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EXHIBIT B

FORM OF IRREVOCABLE RESIGNATION RE: NOMINATION AND STANDSTILL AGREEMENT

Board of Directors

Freeport-McMoRan Inc.

333 North Central Avenue

Phoenix, Arizona 85004-2189

 

Re:

Resignation

Ladies and Gentlemen:

This irrevocable resignation is delivered pursuant to Sections 1 and 7 of that certain Nomination and Standstill Agreement, dated October 7, 2015, between Freeport-McMoRan Inc. and the members of the Icahn Group signatory thereto (the “Agreement”). Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement. Effective only upon, and subject to, such time as (X) the Icahn Group, together with all of the Icahn Affiliates, ceases collectively to “beneficially own” (as defined in Rule 13d-3 under the Exchange Act) an aggregate Net Long Position of at least 60,000,000 shares of Common Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like), I hereby resign from my position as a director of the Company and from any and all committees of the Board on which I serve if I am the Icahn Designee designated by the Icahn Group to resign, (Y) the Icahn Group, together with all of the Icahn Affiliates, ceases collectively to “beneficially own” (as defined in Rule 13d-3 under the Exchange Act) an aggregate Net Long Position of at least 40,000,000 shares of Common Stock (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like), I hereby resign from my position as a director of the Company and from any and all committees of the Board on which I serve and (Z) the Icahn Group materially breaches the Agreement or the Confidentiality Agreement (as defined in the Agreement) and fails to cure such breach within five business days of written notice from the Company specifying any such breach, I hereby resign from my position as a director of the Company and from any and all committees of the Board on which I serve.

[Signature Page Follows]

 

 

B-1

Exhibit 10.2

EXECUTION VERSION

CONFIDENTIALITY AGREEMENT

FREEPORT-MCMORAN INC.

October 7, 2015

 

To:	Each of the persons or entities listed on Schedule A hereto (the “Icahn Group” or “you”)

Ladies and Gentlemen:

This letter agreement shall become effective upon the appointment of any Icahn Nominee to the Board of Directors (the “Board”) of Freeport-McMoRan Inc. (the “Company”). Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Nomination and Standstill Agreement (the “Nomination Agreement”), dated as of October 7, 2015, among the Company and the Icahn Group. Solely for purposes of this letter agreement, the individual appointed to the Board of Directors of FCX Oil & Gas Inc. pursuant to Section 1(j) of the Nomination Agreement shall be deemed to be an Icahn Nominee upon such individual’s execution and delivery to the Company of a signature page hereto (and, with respect to such individual, references herein to the “Board” shall be deemed to refer to the Board of Directors of FCX Oil & Gas Inc.). The Company understands and agrees that, subject to the terms of, and in accordance with, this letter agreement, the Icahn Nominee may, if and to the extent he or she desires to do so, disclose information he or she obtains while serving as a member of the Board to you and your Representatives (as hereinafter defined), and may discuss such information with any and all such persons, subject to the terms and conditions of this Agreement. As a result, you may receive certain non-public information regarding the Company. You acknowledge that this information is proprietary to the Company and may include trade secrets or other business information the disclosure of which could harm the Company. In consideration for, and as a condition of, the information being furnished to you and, subject to the restrictions in paragraph 2, the persons set forth on Schedule B hereto (collectively, the “Representatives”), you agree to treat any and all information concerning or relating to the Company or any of its subsidiaries or affiliates that is furnished to you or your Representatives (regardless of the manner in which it is furnished, including in written or electronic format or orally, gathered by visual inspection or otherwise) by any Icahn Nominee, or by or on behalf of the Company, together with any notes, analyses, reports, models, compilations, studies, interpretations, documents, records or extracts thereof containing, referring, relating to, based upon or derived from such information, in whole or in part (collectively, “Evaluation Material”), in accordance with the provisions of this letter agreement, and to take or abstain from taking the other actions hereinafter set forth.

1. The term “Evaluation Material” does not include information that (i) is or has become generally available to the public other than as a result of a direct or indirect disclosure by you or your Representatives in violation of this letter agreement or any obligation of

 

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confidentiality, (ii) was within your or any of your Representatives’ possession on a non-confidential basis prior to its being furnished to you by any Icahn Nominee, or by or on behalf of the Company or its agents, representatives, attorneys, advisors, directors, officers or employees (collectively, the “Company Representatives”) or (iii) is received from a source other than any Icahn Nominee, the Company or any of the Company Representatives; provided, that in the case of (ii) or (iii) above, the source of such information was not believed by you, after reasonable inquiry of the disclosing person, to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or any other person with respect to such information at the time the information was disclosed to you.

2. You and your Representatives will, and you will cause your Representatives to, (a) keep the Evaluation Material strictly confidential and (b) not disclose any of the Evaluation Material in any manner whatsoever without the prior written consent of the Company; provided, however, that you may privately disclose any of such information: (A) to your Representatives (i) who need to know such information for the sole purpose of advising you on your investment in the Company and (ii) who are informed by you of the confidential nature of such information; provided, further, that you will be responsible for any violation of this letter agreement by your Representatives as if they were parties hereto; and (B) to the Company and the Company Representatives. It is understood and agreed that no Icahn Nominee shall disclose to you or your Representatives any Legal Advice (as defined below) that may be included in the Evaluation Material with respect to which such disclosure may constitute waiver of the Company’s attorney client privilege or attorney work product privilege. “Legal Advice” as used herein shall be solely and exclusively limited to the advice provided by legal counsel and shall not include factual information or the formulation or analysis of business strategy that is not protected by the attorney-client or attorney work product privilege.

3. In the event that you or any of your Representatives are required by applicable subpoena, legal process or other legal requirement to disclose any of the Evaluation Material, you will promptly notify (except where such notice would be legally prohibited) the Company in writing by facsimile and certified mail so that the Company may seek a protective order or other appropriate remedy (and if the Company seeks such an order, you will provide such cooperation as the Company shall reasonably request), at its cost and expense. Nothing herein shall be deemed to prevent you or your Representatives, as the case may be, from honoring a subpoena, legal process or other legal requirement that requires discovery, disclosure or production of the Evaluation Material if (a) you produce or disclose only that portion of the Evaluation Material which your outside legal counsel of national standing advises you is legally required to be so produced or disclosed and you inform the recipient of such Evaluation Material of the existence of this letter agreement and the confidential nature of such Evaluation Material; or (b) the Company consents in writing to having the Evaluation Material produced or disclosed pursuant to the subpoena, legal process or other legal requirement. In no event will you or any of your Representatives oppose action by the Company to obtain a protective order or other relief to prevent the disclosure of the Evaluation Material or to obtain reliable assurance that confidential treatment will be afforded the Evaluation Material. For the avoidance of doubt, it is understood that there shall be no “legal requirement” requiring you to disclose any Evaluation Material solely by virtue of the fact that, absent such disclosure, you would be prohibited from purchasing, selling, or engaging in derivative or other voluntary transactions with respect to the Common Stock of the Company or otherwise proposing or making an offer to do any of the

 

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foregoing, or you would be unable to file any proxy materials in compliance with Section 14(a) of the Exchange Act or the rules promulgated thereunder.

4. You acknowledge that (a) none of the Company or any of the Company Representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any Evaluation Material, and (b) none of the Company or any of the Company Representatives shall have any liability to you or to any of your Representatives relating to or resulting from the use of the Evaluation Material or any errors therein or omissions therefrom. You and your Representatives (or anyone acting on your or their behalf) shall not directly or indirectly initiate contact or communication with any executive or employee of the Company other than the Chairman, Chief Executive Officer, Chief Executive Officer of the Oil & Gas business, Chief Financial Officer, Chief Administrative Officer, General Counsel, and/or such other persons approved in writing by the foregoing or the Board concerning Evaluation Material, or to seek any information in connection therewith from any such person other than the foregoing, without the prior consent of the Company; provided, however, the restriction in this sentence shall not in any way apply to any Icahn Nominee or other Board members, in each case acting in such capacity.

5. All Evaluation Material shall remain the property of the Company. Neither you nor any of your Representatives shall by virtue of any disclosure of and/or your use of any Evaluation Material acquire any rights with respect thereto, all of which rights (including all intellectual property rights) shall remain exclusively with the Company. Upon the request of the Company for any reason, you will promptly return to the Company or destroy all hard copies of the Evaluation Material and use commercially reasonable efforts to permanently erase or delete all electronic copies of the Evaluation Material in your or any of your Representatives’ possession or control (and, upon the request of the Company, shall certify to the Company that such Evaluation Material has been erased or deleted, as the case may be). Notwithstanding the return or erasure or deletion of Evaluation Material, you and your Representatives will continue to be bound by the obligations contained herein.

6. You acknowledge, and will advise your Representatives, that the Evaluation Material may constitute material non-public information under applicable federal and state securities laws, and that you shall not, and you shall use your commercially reasonable efforts to ensure that your Representatives, do not, trade or engage in any derivative or other transaction, on the basis of such information in violation of such laws.

7. You hereby represent and warrant to the Company that (i) you have all requisite company power and authority to execute and deliver this letter agreement and to perform your obligations hereunder, (ii) this letter agreement has been duly authorized, executed and delivered by you, and is a valid and binding obligation, enforceable against you in accordance with its terms, (iii) this letter agreement will not result in a violation of any terms or conditions of any agreements to which you are a party or by which you may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting you, and (iv) your entry into this letter agreement does not require approval by any owners or holders of any equity or other interest in you (except as has already been obtained).

 

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8. Any waiver by the Company of a breach of any provision of this letter agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this letter agreement. The failure of the Company to insist upon strict adherence to any term of this letter agreement on one or more occasions shall not be considered a waiver or deprive the Company of the right thereafter to insist upon strict adherence to that term or any other term of this letter agreement.

9. You acknowledge and agree that the value of the Evaluation Material to the Company is unique and substantial, but may be impractical or difficult to assess in monetary terms. You further acknowledge and agree that in the event of an actual or threatened violation of this letter agreement, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy. Accordingly, you acknowledge and agree that, in addition to any and all other remedies which may be available to the Company at law or equity, the Company shall be entitled to an injunction or injunctions to prevent breaches of this letter agreement and to enforce specifically the terms and provisions of this letter agreement exclusively in the Court of Chancery or other federal or state courts of the State of Delaware. In the event that any action shall be brought in equity to enforce the provisions of this letter agreement, you shall not allege, and you hereby waive the defense, that there is an adequate remedy at law.

10. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the Court of Chancery or other federal or state courts of the State of Delaware in the event any dispute arises out of this letter agreement or the transactions contemplated by this letter agreement, (b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (c) agrees that it shall not bring any action relating to this letter agreement or the transactions contemplated by this letter agreement in any court other than the Court of Chancery or other federal or state courts of the State of Delaware, and each of the parties irrevocably waives the right to trial by jury, (d) agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief, and (e) irrevocably consents to service of process by a reputable overnight delivery service, signature requested, to the address of such party’s principal place of business or as otherwise provided by applicable law. THIS LETTER AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

11. This letter agreement and the Nomination and Standstill Agreement contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersedes all prior or contemporaneous agreements or understandings, whether written or oral. This letter agreement may be amended only by an agreement in writing executed by the parties hereto.

13. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by both telecopy and electronic mail,

 

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when such telecopy and electronic mail is transmitted to the telecopy number set forth below and the appropriate confirmation is received and sent to the electronic mail address set forth below or (b) if given by any other means, when actually received during normal business hours at the address specified in this subsection:

If to the Company:

Freeport-McMoRan Inc. 333 North Central Avenue

Phoenix, Arizona 85004-2189

Facsimile: 602-366-7691

Email:    Rick_McMillan@fmi.com

Douglas_Currault@fmi.com

Attention:     General Counsel

Deputy General Counsel and Corporate Secretary

With a copy to (which shall not constitute notice):

Wachtell, Lipton, Rosen & Katz

51 West 52^nd Street

New York, NY 10019

Facsimile: 212-403-2000

Email:    DEShapiro@wlrk.com

JELevine@wlrk.com

Attention:         David E. Shapiro

      Jenna E. Levine

If to the Icahn Group:

Icahn Associates Holdings LLC

767 Fifth Avenue, 47^th Floor

New York, NY 10153

Facsimile: 212-750-5807

Email: KCozza@sfire.com

Attention:        Keith Cozza

With a copy to (which shall not constitute notice):

Icahn Associates Holdings LLC

767 Fifth Avenue, 47^th Floor

New York, NY 10153

Facsimile:  917-591-3310 (Mr. Lynn)

212-688-1158 (Mr. Pastor)

Email: JLynn@sfire.com

 

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LPastor@sfire.com

Attention:        Jesse Lynn

         Louie Pastor

14. If at any time subsequent to the date hereof, any provision of this letter agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this letter agreement.

15. This letter agreement may be executed (including by facsimile or PDF) in two or more counterparts which together shall constitute a single agreement.

16. This letter agreement and the rights and obligations herein may not be assigned or otherwise transferred, in whole or in part, by you without the express written consent of the Company. This letter agreement, however, shall be binding on successors of the parties hereto.

17. The Icahn Group shall cause any Replacement for an Icahn Nominee appointed to the Board pursuant to the Nomination Agreement to execute a copy of this letter agreement.

18. This letter agreement shall expire two (2) years from the last date on which any Icahn Nominee serves as a director of the Company; except that you shall maintain in accordance with the confidentiality obligations set forth herein any Evaluation Material constituting trade secrets for such longer time as such information constitutes a trade secret of the Company as defined under 18 U.S.C. § 1839(3).

19. No licenses or rights under any patent, copyright, trademark, or trade secret are granted or are to be implied by this letter agreement.

20. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this letter agreement, and that it has executed the same with the advice of said counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this agreement shall be decided without regards to events of drafting or preparation. The term “including” shall in all instances be deemed to mean “including without limitation.”

[Signature Pages Follow]

 

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Please confirm your agreement with the foregoing by signing and returning one copy of this letter agreement to the undersigned, whereupon this letter agreement shall become a binding agreement between you and the Company.

 

[Signature Page to the Confidentiality Agreement between Freeport-McMoRan Inc. and Icahn Group]

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Accepted and agreed as of the date first written above:

 

[Signature Page to the Confidentiality Agreement between Freeport-McMoRan Inc. and Icahn Group]

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[Signature Page to the Confidentiality Agreement between Freeport-McMoRan and Icahn Group]

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[Signature Page to the Confidentiality Agreement between Freeport-McMoRan and Icahn Group]

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SCHEDULE A

CARL C. ICAHN

HIGH RIVER LIMITED PARTNERSHIP

HOPPER INVESTMENTS LLC

BARBERRY CORP.

ICAHN PARTNERS LP

ICAHN PARTNERS MASTER FUND LP

ICAHN ENTERPRISES G.P. INC.

ICAHN ENTERPRISES HOLDINGS L.P.

IPH GP LLC

ICAHN CAPITAL LP

ICAHN ONSHORE LP

ICAHN OFFSHORE LP

BECKTON CORP.

 

Schedule A

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SCHEDULE B

1. MR. CARL ICAHN

2. Any full-time employee of a member of the Icahn Group or Icahn Associates Holding LLC (an indirect holding company of Carl Icahn)

Exhibit 99.1

 

 

333 North Central Avenue

•    Phoenix, AZ 85004

Financial Contacts: Kathleen L. Quirk (602) 366-8016

David P. Joint (504) 582-4203

Media Contact: Eric E. Kinneberg (602) 366-7994

Freeport-McMoRan Announces New Board Structure &

Review of Strategic Alternatives for its Oil & Gas Business

 

 

PHOENIX, AZ, October 6, 2015 – Freeport-McMoRan Inc. (NYSE: FCX) announced today that it has reduced the size of its Board from sixteen to nine members and is undertaking a review of strategic alternatives for its oil and gas business, following constructive discussions with many of its largest shareholders.

The reconstituted FCX Board is comprised of seven independent directors: Gerald J. Ford (Lead Independent Director), Robert A. Day, Lydia H. Kennard, Jon C. Madonna, Dustan E. McCoy, Stephen H. Siegele and Frances Fragos Townsend; and two executive directors: James R. Moffett, Chairman, and Richard C. Adkerson, Vice Chairman, President and Chief Executive Officer. In addition, the Company will no longer have an Office of the Chairman management structure.

Gerald J. Ford, Lead Independent Director, said: “We have discussed as a Board our proper and most effective size and make-up, consistent with the needs of the business going forward. We have listened to and taken into account views and concerns from many of our largest shareholders. Our newly reconstituted Board brings diverse and extensive professional, financial and business experience while balancing independence and tenure. The Board represents a strong blend of institutional knowledge and fresh perspectives that will benefit shareholders as we address market challenges and position the company for long-term success.”

FCX also announced that its Board has undertaken a strategic review of its oil and gas business (FM O&G) to evaluate alternative courses of action designed to enhance value to FCX shareholders and achieve self-funding of the oil and gas business from its cash flows and resources.

FM O&G’s high quality asset base, substantial underutilized Deepwater Gulf of Mexico infrastructure, large inventory of low risk development opportunities and talented and experienced personnel and management team provide alternatives to generate value. The previously announced potential public offering of a minority interest in FCX’s oil and gas business remains an alternative for future consideration, the timing of which is subject to market conditions.

Other alternatives currently under consideration include a spinoff of FCX’s oil and gas business to its shareholders, joint venture arrangements and further spending reductions. The oil and gas strategic review is being undertaken with an objective of improving FCX’s financial position and enhancing long-term value for its shareholders.

In preparation of considering a separation of the oil and gas business, five directors have left the FCX Board and have been appointed to the FM O&G Board of Directors. James C. Flores has been named FM O&G Chairman and remains Chief Executive Officer of FM O&G. Joining Mr. Flores on the FM O&G Board are Robert J. Allison, Jr., Alan R. Buckwalter, III, Thomas A. Fry, III and Charles C. Krulak.

H. Devon Graham, Jr. and Bobby Lee Lackey have retired from the FCX Board.

James R. Moffett, Chairman of the Board, said: “On behalf of the Board, I would like to extend our deepest gratitude to our former directors and acknowledge their contributions, service, guidance and counsel while serving on the FCX Board.”

 

 

Freeport-McMoRan			1

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FCX’s strategy will focus on its global leading position in the copper industry. Near-term, this strategy will involve managing its production activities, spending on capital projects and operations, and the administration of its business to enhance cash flows and protect liquidity.

While taking prudent near-term steps responsive to the currently weak market conditions, FCX remains confident about the longer term outlook for copper prices based on the global demand and supply fundamentals. A primary objective will be a significant reduction over time of FCX’s current debt level. With its established reserves and large scale current production base, its significant portfolio of undeveloped resources, and its global organization of highly qualified dedicated workers and management, FCX is well positioned to build value for its shareholders.

FCX is a premier U.S.-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. FCX is the world’s largest publicly traded copper producer.

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; significant mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America; the Tenke Fungurume minerals district in the DRC; and significant U.S. oil and natural gas assets in the Deepwater GOM, onshore and offshore California and in the Haynesville natural gas shale, and a position in the Inboard Lower Tertiary/Cretaceous natural gas trend onshore in South Louisiana.

Cautionary Statement Regarding Forward-Looking Statements: This press release contains forward-looking statements, which are all statements other than statements of historical facts, such as expectations relating to commodity prices, development and production activities, production volumes, ability to repay debt, statements regarding the review of strategic alternatives for FCX’s oil and gas business, including the previously announced potential public offering of a minority interest in FCX’s oil and gas business, a potential spinoff of FCX’s oil and gas business to its shareholders, potential joint venture arrangements, and potential further spending reductions. FCX cautions readers that those statements are not guarantees of future performance and actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements. In particular, on August 5, 2015, we announced revisions to our oil and gas capital expenditure and production outlook and on August 27, 2015, we announced revisions to our mining operations capital expenditure and production outlook.

Important factors that can cause FCX’s actual results to differ materially from those anticipated in the forward-looking statements include supply of and demand for, and prices of, copper, gold, molybdenum, cobalt, crude oil and natural gas, mine sequencing, production rates, industry risks, regulatory changes, political risks, drilling results, potential additional oil and gas property impairment charges, potential lower of cost or market inventory adjustments, potential impairment of long-lived mining assets, FCX’s ability to complete transactions with strategic investors interested in investing capital in the development of its oil and gas and mining properties, FCX’s ability to launch or complete the previously announced potential initial public offering of a minority interest in Freeport-McMoRan Oil & Gas Inc. on acceptable terms or at all, any decisions with respect to and the timing and success of any other strategic alternatives for FCX’s oil and gas business, the outcome of negotiations with the Indonesian government regarding PT Freeport Indonesia’s Contract of Work, PT Freeport Indonesia’s ability to obtain renewal of its export license after January 28, 2016, PT Freeport Indonesia’s ability to renew its bi-annual labor agreement expiring in September 2015, the potential effects of violence in Indonesia, the resolution of administrative disputes in the Democratic Republic of Congo, weather- and climate-related risks, labor relations, environmental risks, litigation results and other factors described in more detail in Part I, Item 1A. “Risk Factors” of FCX’s annual report on Form 10-K for the year ended December 31, 2014, as updated by FCX’s subsequent filings with the Securities and Exchange Commission.

Investors are cautioned that many of the assumptions on which FCX’s forward-looking statements are based are likely to change after the forward-looking statements are made, including for example commodity prices, which FCX cannot control, and production volumes and costs, some aspects of which FCX may not be able to control. Further, FCX may make changes to its business plans that could affect its results. FCX cautions investors that it does not intend to update forward-looking statements more frequently than quarterly notwithstanding any changes in FCX’s assumptions, changes in business plans, actual experience or other changes, and FCX undertakes no obligation to update any forward-looking statements.

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Freeport-McMoRan			2

Exhibit 99.2

 

 

333 North Central Avenue

•    Phoenix, AZ 85004

Financial Contacts: Kathleen L. Quirk (602) 366-8016

David P. Joint (504) 582-4203

Media Contact: Eric E. Kinneberg (602) 366-7994

Freeport-McMoRan Appoints Two New Directors

 

 

PHOENIX, AZ, October 7, 2015 – Freeport-McMoRan Inc. (NYSE: FCX) announced today that it has entered into an agreement with Carl C. Icahn and his affiliates. In connection with this agreement, Andrew Langham and Courtney Mather have been appointed to FCX’s Board of Directors. With these additions, the FCX Board is comprised of eleven directors, nine independent directors and two executive directors.

Andrew Langham has been General Counsel of Icahn Enterprises L.P. since January 2015 and was previously Assistant General Counsel since 2005. Courtney Mather has served as a Managing Director of Icahn Capital LP since April 2014.

Carl C. Icahn, together with his affiliates, beneficially owns approximately 100 million shares of FCX common stock, which represents approximately 8.8% of FCX’s outstanding shares.

FCX is a premier U.S.-based natural resources company with an industry-leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. FCX is the world’s largest publicly traded copper producer.

FCX’s portfolio of assets includes the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold deposits; significant mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America; the Tenke Fungurume minerals district in the DRC; and significant U.S. oil and natural gas assets in the Deepwater GOM, onshore and offshore California and in the Haynesville natural gas shale, and a position in the Inboard Lower Tertiary/Cretaceous natural gas trend onshore in South Louisiana.

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Freeport-McMoRan			1