SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Freeport-McMoRan Copper & Gold Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Notes:
[LOGO OF FREEPORT-MCMORAN APPEARS HERE]
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 29, 1997
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March 20, 1997
The Annual Meeting of Stockholders of Freeport-McMoRan Copper & Gold Inc.
will be held at the office of the corporation, 1615 Poydras Street, New
Orleans, Louisiana, on Tuesday, April 29, 1997, at 9:00 a.m., for the
following purposes:
(1) To elect five of fifteen directors to hold office for three years and
until their respective successors are elected and qualified;
(2) To ratify the appointment of Arthur Andersen LLP as the independent
auditors to audit the financial statements of the corporation and its
subsidiaries for the year 1997;
(3) To consider and vote on a stockholder proposal described in the
attached proxy statement; and
(4) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 7, 1997, as
the record date for the determination of stockholders entitled to notice of
and to vote at the meeting.
Your vote is important. Whether or not you plan to attend the meeting,
please complete, sign and date the enclosed proxy card and return it promptly
in the enclosed envelope. Your cooperation will be appreciated.
By Order of the Board of
Directors.
Michael C. Kilanowski, Jr.
Secretary
FREEPORT-McMoRan COPPER & GOLD INC.
1615 POYDRAS STREET
NEW ORLEANS, LOUISIANA 70112
The Annual Report to Stockholders for the year 1996, including financial
statements, is being mailed to stockholders together with these proxy
materials on or about March 20, 1997.
PROXY STATEMENT
This proxy statement is furnished in connection with a solicitation of
proxies by the Board of Directors (the "Board of Directors" or the "Board") of
Freeport-McMoRan Copper & Gold Inc. (the "Company") for use at its Annual
Meeting of Stockholders to be held on April 29, 1997, and at any adjournments
thereof (the "Meeting").
VOTING PROCEDURES
Stockholders of record at the close of business on March 7, 1997 (the
"Record Date") will be entitled to vote at the Meeting. On the Record Date
there were outstanding 83,344,144 shares of the Company's Class A Common Stock
("Class A Common Shares"), 117,798,848 shares of the Company's Class B Common
Stock ("Class B Common Shares" and together with the Class A Common Shares,
the "Common Shares"), 13,999,600 depositary shares, each representing 0.05
shares of the Company's Step-Up Convertible Preferred Stock (the "Step-Up
Preferred Shares"), 6,000,000 depositary shares, each representing 0.05 shares
of the Company's Gold-Denominated Preferred Stock (the "Gold Preferred
Shares"), 4,305,580 depositary shares, each representing 0.05 shares of Gold-
Denominated Preferred Stock, Series II (the "Gold-II Preferred Shares"), and
4,760,000 depositary shares, each representing 0.025 shares of the Company's
Silver-Denominated Preferred Stock (the "Silver Preferred Shares" and together
with the Step-Up Preferred Shares, the Gold Preferred Shares and the Gold-II
Preferred Shares, the "Preferred Shares"). The Common Shares and the Preferred
Shares are referred to herein collectively as the "Company Shares."
The Company's By-Laws (the "By-Laws") provide that the holders of a majority
of the Company Shares issued and outstanding and entitled to vote at the
Meeting, present in person or represented by proxy, will constitute a quorum
at the Meeting. The persons appointed by the Company to act as inspectors of
election will treat the Company Shares represented by a properly executed and
returned proxy as present at the Meeting for purposes of determining a quorum.
The Company Shares present at the Meeting that abstain from voting or that are
the subject of broker non-votes will be counted as present for purposes of
determining a quorum.
The Company's Certificate of Incorporation (the "Certificate") provides that
holders of Class A Common Shares and Preferred Shares, voting together as a
single class, have the right to
elect 20% of the Board of Directors, and that holders of Class B Common Shares
have the right to elect 80% of the Board of Directors. If these percentages do
not yield whole numbers, the number of directors to be elected by the holders
of the Class A Common Shares and Preferred Shares will be rounded down to the
nearest whole number and the number of directors to be elected by the holders
of the Class B Common Shares will be rounded up to the nearest whole number.
The By-Laws provide that the Company's directors will be elected by a
plurality vote. Except with respect to the election of directors, the Class A
Common Shares and Class B Common Shares, voting together as a single class,
have exclusive voting rights with respect to all matters to come before the
Meeting. Each of the Company Shares entitles the holder thereof to one vote on
all matters as to which the holder is entitled to vote. Each record holder of
depositary shares representing Preferred Shares will be entitled to instruct
the depositary as to the exercise of the voting rights pertaining to the
number of Preferred Shares represented by such holder's depositary shares.
Votes cast at the Meeting will be counted by the inspectors of election.
Because directors will be elected by a plurality vote, abstentions and
broker non-votes will have no effect upon the election of directors. All other
matters to come before the Meeting require the approval of a majority of the
Common Shares present and entitled to vote at the Meeting with respect to such
matters; therefore, abstentions as to particular proposals will have the same
effect as votes against such proposals. Broker non-votes as to particular
proposals will not be deemed to be a part of the voting power present with
respect to such proposals, will not count as votes for or against such
proposals and will not be included in calculating the number of votes
necessary for approval of such proposals.
Proxies in the enclosed form are solicited by the Board of Directors to
provide an opportunity to every stockholder to vote on all matters scheduled
to come before the Meeting as to which such stockholder is entitled to vote,
whether or not he or she attends in person. If the proxies in the enclosed
form are properly executed and returned, the shares represented thereby will
be voted as specified. If no specifications are made, the proxies representing
the Common Shares will be voted in favor of the proposed nominees, for the
ratification of the appointment of auditors and against the stockholder
proposal. If no specifications are made, proxies representing the Preferred
Shares will be voted in favor of the proposed nominees. Any stockholder
submitting a proxy may revoke that proxy or submit a revised proxy at any time
before it is voted. A stockholder may also attend the Meeting in person and
vote by ballot, thereby canceling any proxy previously given. Management
expects no matters to be presented for action at the Meeting other than the
election of directors, the ratification of the appointment of auditors and the
stockholder proposal. If, however, any other matters properly come before the
Meeting, the persons named as proxies in the enclosed form of proxy intend to
vote in accordance with their judgment.
PROXY SOLICITATION
The Company will pay all expenses of soliciting proxies for the Meeting. In
addition to solicitations by mail, arrangements have been made for brokers and
nominees to send proxy materials
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to their principals, and the Company will reimburse them for their reasonable
expenses in doing so. The Company has retained Georgeson & Co. Inc., Wall
Street Plaza, New York, New York, to assist with the solicitation of proxies
from brokers and nominees. It is estimated that the fees for such firm's
services will be $7,500 plus its reasonable out-of-pocket expenses. Certain
employees of the Company, who will receive no additional compensation for
their services, may also solicit proxies by telephone, telegram, telex,
telecopy or personal interview.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's 1998 proxy
materials, stockholder proposals must be received by the Company no later than
November 19, 1997.
CORPORATE GOVERNANCE
The Board of Directors, which held six meetings during 1996, has primary
responsibility for directing the management of the business and affairs of the
Company. The Board currently consists of seventeen members, but following the
Meeting will consist of fifteen members as set by the Board of Directors in
accordance with the Certificate. To provide for effective direction and
management of the Company's business, the Board of Directors has established
five committees, including the Audit Committee, the Nominating Committee and
the Corporate Personnel Committee.
The Audit Committee reviews the Company's financial statements and exercises
general oversight with respect to the activities of the Company's independent
auditors, principal accounting officer and internal auditing group and related
matters. The Audit Committee currently consists of Mr. Day as Chairman, and
Messrs. Bruce, Davis, Harrison, Johnston, Kissinger, Lackey, Rankin and Siegel
and Ms. McDonald, none of whom is an officer or employee of the Company or any
of its subsidiaries. The Audit Committee met three times during 1996.
The Nominating Committee makes recommendations to the Board concerning the
structure of the Board, corporate governance and proposed new members of the
Board, and nominates individuals to stand for election as directors. The
Nominating Committee will consider recommendations by the Company's
stockholders of potential nominees for election as directors. The Company's
Secretary will, upon written request from any stockholder, furnish information
concerning the procedures required to be followed in connection with such
recommendation. The Nominating Committee currently consists of Mr. Rankin as
Chairman, and Messrs. Clifford, Day, Moffett and Woods. The Nominating
Committee held two meetings during 1996.
The Corporate Personnel Committee, which is described further below,
currently consists of Mr. Bruce as Chairman, and Messrs. Harrison, Putnam,
Wharton and Woods. The Corporate Personnel Committee met nine times during
1996.
3
During 1996 each of the current directors attended at least 75% of the
aggregate number of meetings held of the Board and Board committees on which
he or she served, except Mr. Harrison and Ms. McDonald.
ELECTION OF DIRECTORS
As discussed above, the Certificate provides that the holders of Class A
Common Shares and Preferred Shares, voting as a class, elect 20% of the Board
and that the holders of Class B Common Shares elect the remaining 80%. The
Board of Directors has fixed the number of directors at fifteen as of the
Meeting, three of whom are elected by the holders of Class A Common Shares and
Preferred Shares (the "Class A Directors") and twelve of whom are elected by
the holders of Class B Common Shares (the "Class B Directors"). In addition,
the Board consists of three classes, each of which serves a three-year term of
office with one class being elected each year.
Pursuant to an agreement (the "RTZ-CRA Agreement") among the Company,
Freeport-McMoRan Inc. ("FTX"), The RTZ-CRA Group ("RTZ-CRA") and certain of
RTZ-CRA's affiliates (the "RTZ-CRA Affiliates"), RTZ-CRA has the right to
submit for nomination for election by the Company's stockholders the
percentage of directors, rounded to the nearest whole number, that is
proportionately equal to the aggregate percentage ownership by the RTZ-CRA
Affiliates of all outstanding Common Shares. The RTZ-CRA Affiliates may
nominate directors either as Class A Directors or Class B Directors, but the
percentage of Class B Directors so nominated, if any, cannot exceed the
percentage of the total number of Class B Common Shares outstanding that are
owned by the RTZ-CRA Affiliates. As of the Record Date, RTZ Indonesia Limited,
an RTZ-CRA Affiliate, owned 23,931,100 Class A Common Shares, or approximately
11.9% of the Common Shares outstanding. In the RTZ-CRA Agreement, the Company
agreed to include the nominees submitted by the RTZ-CRA Affiliates with the
directors nominated by the Board for election by Company stockholders and to
refrain from taking any action that may hinder the election of such nominees.
Messrs. Clifford and Davis are the directors selected by RTZ-CRA and both
serve as Class A Directors.
The persons named as proxies in the enclosed form of proxy, unless otherwise
directed, intend to vote in that capacity for the election of J. Taylor
Wharton (who serves currently as a Class A Director) and William B. Harrison,
Jr., J. Bennett Johnston, Henry A. Kissinger and Rene L. Latiolais (all of
whom serve currently as Class B Directors) as members of Class II to serve
until the 2000 Annual Meeting of Stockholders. Messrs. Davis, Moffett, Putnam
and Rankin are members of Class III and are serving terms that expire at the
1998 Annual Meeting of Stockholders, and Messrs. Bruce, Clifford, Day, Lackey
and Mealey and Ms. McDonald are members of Class I and are serving terms that
expire at the 1999 Annual Meeting of Stockholders.
4
INFORMATION ABOUT NOMINEES AND DIRECTORS
The following table provides certain information as of December 31, 1996
with respect to each director nominee and each other director whose term will
continue after the Meeting. Unless otherwise indicated, each person has been
engaged in the principal occupation shown for the past five years.
YEAR FIRST
NAME OF NOMINEE PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS ELECTED A
OR DIRECTOR AGE AND POSITIONS WITH THE COMPANY DIRECTOR
--------------- --- ------------------------------------------------ ----------
Robert W. Bruce III 52 President, The Robert Bruce Management Co., 1995
Inc., investment managers. Managing Partner,
Steamboat Group, until 1992. Director of FTX
and McMoRan Oil & Gas Co. ("MOXY").
R. Leigh Clifford 49 Managing Director, CRA Limited ("CRA"), a mining 1995
and metals producer. Mining Director, RTZ-CRA,
a worldwide mining and smelting company, until
1996. Group Executive for CRA, until 1993.
Director of CRA and RTZ Corporation PLC
("RTZ"), a mining and smelting company.
Leon A. Davis 57 Chief Executive, RTZ-CRA. Chief Operating 1996
Officer, RTZ-CRA until December 1996. Chief
Executive, CRA, until March 1996. Mining
Director of RTZ until 1994. Director of CRA and
RTZ.
Robert A. Day 53 Chairman of the Board of Trust Company of the 1995
West, an investment management company.
Chairman and President of W.M. Keck Foundation.
Director of Fisher Scientific International,
Inc., FTX and MOXY.
William B. Harrison, Jr. 53 Vice Chairman of The Chase Manhattan Corporation 1995
and its subsidiary, The Chase Manhattan Bank.
Director of Dillard Department Stores, Inc.,
FTX and MOXY.
J. Bennett Johnston 64 Chairman of Johnston and Associates, LLC, a 1997
legal and business consulting firm, and
Chairman of Johnston Development Co. LLC, a
project development firm. United States Senator
until January 1997. Director of Chevron Corp.,
URS Corp. and Columbia Gas System Inc.
5
YEAR FIRST
NAME OF NOMINEE PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS ELECTED A
OR DIRECTOR AGE AND POSITIONS WITH THE COMPANY DIRECTOR
--------------- --- ------------------------------------------------ ----------
Henry A. Kissinger 73 Chairman of the Board and Chief Executive 1995
Officer, Kissinger Associates, Inc.,
international consultants and consultants to
the Company. Director of Revlon, Inc.,
Hollinger International Inc. and FTX.
Bobby Lee Lackey 59 President and Chief Executive Officer of J.S. 1995
McManus Produce Company, Inc., grower of
vegetables and shipper of fruits and
vegetables. Director of FTX and MOXY.
Rene L. Latiolais 54 Vice Chairman of the Board of the Company since 1993
1994. Commissioner of P.T. Freeport Indonesia
Company ("PT-FI"), an operating subsidiary of
the Company, since 1993. President and Chief
Executive Officer of FTX and Freeport-McMoRan
Resource Partners, Limited Partnership. Chief
Operating Officer of FTX until 1995. Executive
Vice President of FTX until 1993. Senior Vice
President of FTX until 1992. Director of FTX.
Gabrielle K. McDonald 54 Judge, International Criminal Tribunal for the 1995
Former Yugoslavia. Distinguished Visiting
Professor of Law, Texas Southern University,
Thurgood Marshall School of Law, until 1995.
Visiting Professor of Law, St. Mary's
University School of Law, and of counsel,
Walker & Satterthwaite, law firm, until 1993.
Director of FTX and MOXY.
George A. Mealey 63 Vice President Commissioner of PT-FI and 1988
consultant to the Company. President and Chief
Operating Officer of the Company and Executive
Vice President of FTX until 1996.
James R. Moffett 58 Chairman of the Board and Chief Executive 1992
Officer of the Company. President Commissioner
of PT-FI. Chairman of the Board of FTX and Co-
Chairman of the Board of MOXY.
George Putnam 70 Chairman of The Putnam Investment Management 1995
Company, Inc. and of each of the members of the
Putnam group of mutual funds. Director of The
Boston Company, Inc., Boston Safe Deposit and
Trust Company, Houghton-Mifflin Company, Marsh-
McLennan Companies Inc., Rockefeller Group,
Inc., FTX and MOXY.
6
YEAR FIRST
NAME OF NOMINEE PRINCIPAL OCCUPATIONS, OTHER DIRECTORSHIPS ELECTED A
OR DIRECTOR AGE AND POSITIONS WITH THE COMPANY DIRECTOR
--------------- --- ------------------------------------------------ ----------
B. M. Rankin, Jr. 66 Private investor. Director of FTX and MOXY. 1995
J. Taylor Wharton 58 Chairman of the Department of Gynecology at the 1995
University of Texas M.D. Anderson Cancer
Center. Director of FTX and MOXY.
The directors of the Company who also serve as directors of FTX and MOXY
constitute a majority of the directors of each of those corporations.
DIRECTOR COMPENSATION
Each director who is not an officer or employee of the Company or any of its
subsidiaries receives: (i) an annual fee of $25,000 for serving on the Board;
(ii) a fee of $1,000 for attendance at each meeting of the Board or a Board
committee; and (iii) an annual fee of $2,000 for each Board committee of which
a director is the chairperson. Each director who is also an officer or
employee of the Company or any of its subsidiaries receives a fee of $1,000
for attendance at each Board meeting.
RETIREMENT PLAN FOR NON-OFFICER DIRECTORS
The Company has a retirement plan for the benefit of non-officer directors
who reach age sixty-five. Under the retirement plan, an eligible director will
be entitled to an annual benefit equal to a percentage of the standard portion
of the annual fee for a director at the time of his or her retirement. The
amount of such percentage, which is at least 50% but not greater than 100%,
will depend on the number of years the retiree served as a non-officer
director of the Company or its predecessors. The benefit is payable from the
date of retirement until the retiree's death.
STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Each director who is not an employee of the Company is eligible for the
grant of options under the Company's 1995 Stock Option Plan for Non-Employee
Directors (the "1995 Plan"). On August 1 of each year through 2004, each
eligible director will be granted a non-qualified option to purchase 10,000
Class B Common Shares at 100% of the fair market value of such shares on the
date of grant. Each option granted under the 1995 Plan expires ten years after
the date of grant. In accordance with the 1995 Plan, on August 1, 1996 each
non-employee director was granted an option to purchase 10,000 Class B Common
Shares at an exercise price of $30.4375. During 1996 none of the current
directors exercised options granted under the 1995 Plan.
MATCHING GIFTS PROGRAM
The Freeport-McMoRan Foundation (the "Foundation") administers a matching
gifts program in which the Company participates. The program is available to
the Company's directors, officers,
7
employees, full-time consultants and retirees. Under the program, the
Foundation will match gifts made by a participant to eligible institutions,
including educational institutions, educational associations, educational
funds, cultural institutions, social service community organizations, hospital
organizations and environmental organizations. The Foundation provides the
gifts directly to the institution. The Foundation double matches gifts by a
director not in excess of $1,000 and gifts by any other participant not in
excess of $500. The annual amount of Company matching gifts for any director
may not exceed $40,000, and for any other participant may not exceed $20,000.
The matching gifts made by the Foundation on behalf of the Company in 1996 for
each of the participating directors were as follows: $40,000 for Mr. Bruce;
$28,200 for Mr. Harrison; $38,500 for Mr. Kissinger; $9,775 for Mr. Lackey;
$3,675 for Mr. Latiolais; $2,000 for Ms. McDonald; $14,320 for Mr. Mealey;
$40,000 for Mr. Moffett; $40,000 for Mr. Putnam; $26,170 for Mr. Rankin; and
$4,500 for Mr. Wharton.
8
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding the ownership of the
Class A Common Shares and Class B Common Shares by (i) each director nominee
and each other director whose term will continue after the Meeting, (ii) each
executive officer for whom compensation information is disclosed under the
heading "Executive Officer Compensation" and (iii) all directors and executive
officers of the Company as a group, determined in accordance with Rule 13d-3
of the Securities and Exchange Commission ("SEC") based on information
furnished by such persons. None of the persons shown below beneficially owns
any Preferred Shares, except for Mr. Goodyear who owns 2,000 depositary shares
representing 50 Silver Preferred Shares and certain persons who beneficially
own depositary shares representing Step-Up Preferred Shares as reflected in
the notes below. Unless otherwise indicated, all information is presented as
of December 31, 1996 and all shares shown are held with sole voting and
investment power.
NUMBER OF CLASS A NUMBER OF CLASS B COMMON
COMMON SHARES SHARES BENEFICIALLY
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) OWNED (1)(2)
------------------------ --------------------- -------------------------
Richard C. Adkerson 5,503(3) 230,170(3)(4)
Robert W. Bruce III 180,500(5) 304,411(5)
R. Leigh Clifford -- --
Leon A. Davis -- --
Robert A. Day 252 50,961
Charles W. Goodyear -- 177,505(4)(6)
William B. Harrison, Jr. 208(7) 16,481(7)
J. Bennett Johnston -- --
Henry A. Kissinger 240 46,866
Bobby Lee Lackey 128(8) 53,123(8)
Rene L. Latiolais 12,492 523,613(4)(9)
Adrianto Machribie -- 2,295
Gabrielle K. McDonald 6 8,148
George A. Mealey 16,792 386,288
James R. Moffett 72,868(10) 1,664,114(4)(10)
George Putnam 11,232,586(11) 5,193,776(11)
B. M. Rankin, Jr. 83,567(12) 681,388(12)
J. Taylor Wharton 4,893(13) 36,575(13)
Directors and executive
officers as a group
(21 persons) 11,616,475(14) 9,642,188(14)
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(1) With the exception of Mr. Moffett (who beneficially owns 1.4% of the
outstanding Class B Common Shares) and Mr. Putnam (who beneficially owns
13.3% of the outstanding Class A Common Shares and 4.4% of the
outstanding Class B Common Shares), each individual holds less than 1% of
the outstanding Class A Common Shares and Class B Common Shares,
respectively.
9
(2) Includes Class B Common Shares that could be acquired within sixty days
after December 31, 1996, upon the exercise of options granted pursuant to
Company stock option plans for the benefit of such individuals, as
follows: Mr. Adkerson, 112,610 shares; Mr. Bruce, 36,007 shares; Mr. Day,
47,377 shares; Mr. Goodyear, 175,180 shares; Mr. Harrison, 13,534 shares;
Mr. Kissinger, 43,498 shares; Mr. Lackey, 51,256 shares; Mr. Latiolais,
392,560 shares; Mr. Machribie, 2,295 shares; Ms. McDonald, 7,966 shares;
Mr. Mealey, 375,132 shares; Mr. Moffett, 517,250 shares; Mr. Putnam,
51,256 shares; Mr. Rankin, 51,256 shares; Mr. Wharton, 13,534 shares; all
directors and executive officers as a group, 2,126,959 shares.
(3) Includes 5,503 Class A Common Shares and 3,274 Class B Common Shares held
in a retirement trust for the benefit of Mr. Adkerson.
(4) Includes Class B Common Shares held by the trustee under the Company's
Employee Capital Accumulation Program, as follows: Mr. Adkerson, 116
shares; Mr. Goodyear, 2,281 shares; Mr. Latiolais, 69 shares; Mr.
Moffett, 17,738 shares.
(5) Includes 180,000 Class A Common Shares and 261,387 Class B Common Shares
held by a limited partnership with respect to which Mr. Bruce shares
voting and investment power.
(6) Includes 44 Class B Common Shares held in a retirement trust for the
benefit of Mr. Goodyear.
(7) Includes 60 Class A Common Shares and 842 Class B Common Shares owned by
Mr. Harrison's wife.
(8) Includes 68 Class A Common Shares and 1,006 Class B Common Shares held in
a retirement trust for the benefit of Mr. Lackey.
(9) Includes 11,710 Class B Common Shares held in a retirement trust for the
benefit of Mr. Latiolais.
(10) Includes 16,342 Class A Common Shares and 245,125 Class B Common Shares
held for the benefit of trusts with respect to which Mr. Moffett, as co-
trustee, shares voting and investment power but as to which he disclaims
beneficial ownership.
(11) Includes (i) 9,959,818 Class A Common Shares, 5,130,775 Class B Common
Shares and 1,271,936 Class A Common Shares that may be acquired upon the
conversion of Step-Up Preferred Shares held by mutual funds with respect
to which Mr. Putnam shares voting and investment power but as to which he
disclaims beneficial ownership and (ii) 160 Class A Common Shares and
2,266 Class B Common Shares held by a charitable trust with respect to
which Mr. Putnam, as co-trustee, shares voting and investment power but
as to which he disclaims beneficial ownership.
(12) Includes (i) 3,340 Class A Common Shares that may be acquired upon the
conversion of Step-Up Preferred Shares, (ii) 48,269 Class A Common
Shares, 243,496 Class B Common Shares and 3,340 Class A Common Shares
that may be acquired upon the conversion of Step-Up Preferred Shares with
respect to which Mr. Rankin, under a power of attorney, has sole voting
and investment power but as to which he disclaims beneficial ownership
and (iii) 3,340 Class A Common Shares that may be acquired upon the
conversion of Step-Up Preferred Shares with respect to which Mr. Rankin,
under a power of attorney, shares investment power but as to which he
disclaims beneficial ownership.
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(13) Includes (i) 420 Class A Common Shares held in a retirement trust for the
benefit of Mr. Wharton, (ii) 3,011 Class A Common Shares and 8,926 Class
B Common Shares held by Mr. Wharton's wife, (iii) 160 Class A Common
Shares held in a retirement trust for the benefit of Mr. Wharton's wife
and (iv) 332 Class A Common Shares and 4,757 Class B Common Shares held
by Mr. Wharton as custodian for his daughters.
(14) Represents approximately 13.8% of the outstanding Class A Common Shares
and approximately 8.2% of the outstanding Class B Common Shares,
respectively.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information with respect to each person known
by the Company to be a beneficial owner of more than 5% of any class of the
Company's voting securities determined in accordance with Rule 13d-3 of the
SEC based on information furnished by such persons. Unless otherwise
indicated, all information is presented as of December 31, 1996, and all
shares indicated as beneficially owned are held with sole voting and
investment power.
NUMBER OF CLASS A PERCENT NUMBER OF CLASS B PERCENT
NAME AND ADDRESS OF COMMON SHARES OF COMMON SHARES OF
PERSON BENEFICIALLY OWNED CLASS BENEFICIALLY OWNED CLASS
------------------- ------------------ ------- ------------------ -------
Putnam Investments, Inc. 10,117,083(1) 12.0% -- --
One Post Office Square
Boston, Massachusetts
02109
RTZ Indonesia Limited 23,931,100 28.4% -- --
6 St. James's Square
London SW1Y 4LD
England
Oppenheimer Group, Inc. -- -- 28,405,459(2) 24.1%
Oppenheimer Tower
World Financial Center
New York, New York 10281
- ---------
(1) Based on the Schedule 13G dated January 27, 1997 that Putnam Investments,
Inc. filed with the SEC. Putnam Investments, Inc., through its affiliates,
shares voting power with respect to 93,709 Class A Common Shares and
shares investment power with respect to all shares shown but disclaims
beneficial ownership of such shares.
(2) Based on the Schedule 13G dated January 4, 1997 that Oppenheimer Group,
Inc. filed with the SEC. Oppenheimer Group, Inc., through its affiliates,
shares voting and investment power with respect to all shares shown but
disclaims beneficial ownership of such shares.
------------------
11
EXECUTIVE OFFICER COMPENSATION
The following table sets forth information regarding the compensation that
the Company paid to its chief executive officer and each of its four most
highly compensated executive officers (with respect to salary and bonus only)
other than the chief executive officer (collectively, the "Named Executive
Officers"). During 1996, Messrs. Moffett, Adkerson, Latiolais and Goodyear
also provided services to and received compensation from FTX.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------- ------------ --------
SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING LTIP ALL OTHER
POSITION YEAR SALARY(1) BONUS COMPENSATION(2) OPTIONS/SARS PAYOUTS COMPENSATION(3)
------------------ ---- ---------- ---------- --------------- ------------ -------- ---------------
James R. Moffett 1996 $1,069,444 $5,725,000 $161,208(4) 930,000 $271,283 $84,975
Chairman of the 1995 -- 1,819,336 -- 2,456,799 102,485 2,000
Board and Chief 1994 -- -- -- -- -- --
Executive Officer
Rene L. Latiolais 1996 70,000 2,045,000 4,347 200,000 108,513 10,283
Vice Chairman 1995 -- 632,047 -- 735,183 40,994 2,000
of the Board 1994 -- -- -- -- -- --
Richard C. Adkerson 1996 397,727 2,433,000 78,726(5) 250,000 54,257 28,465(6)
Executive Vice 1995 -- 849,660 -- 494,203 20,497 --
President 1994 -- -- -- -- -- --
Charles W. Goodyear(7) 1996 150,000 1,311,000 1,415 110,000 54,257 7,500
Senior Vice 1995 -- 722,507 -- 478,756 20,497 --
President 1994 -- -- -- -- -- --
Adrianto Machribie 1996 287,497 450,000 79,413(8) 5,500 -- --
President Director 1995 167,917 100,000 86,235(8) 16,838 -- --
P.T. Freeport Indonesia 1994 159,267 50,000 89,796(8) -- -- --
Company
- ---------
(1) Prior to January 1, 1996, the Named Executive Officers, other than Mr.
Machribie, were employed by FTX and received salaries from FTX rather than
from the Company.
(2) In addition to items disclosed in notes 4 and 8, includes the Company's
payment of taxes in connection with certain benefits the Company provided
to each Named Executive Officer for 1996 in the following amounts: Mr.
Moffett, $38,806; Mr. Latiolais, $4,347; Mr. Adkerson, $14,822; and Mr.
Goodyear, $1,415. Does not include perquisites that the Company provided
to each Named Executive Officer unless the aggregate amount in any year
exceeded $50,000.
12
(3) Comprised of the Company's contributions to defined contribution plans in
1996, the Company's premium payments for universal life insurance policies
during 1996 and director fees in 1996 as follows:
LIFE
PLAN INSURANCE DIRECTOR
NAME CONTRIBUTIONS PREMIUMS FEES
---- ------------- --------- --------
Mr. Moffett $53,473 $25,502 $6,000
Mr. Latiolais 3,500 783 6,000
Mr. Adkerson 19,886 1,877 --
Mr. Goodyear 7,500 -- --
Mr. Machribie -- -- --
(4) Includes $122,402 of perquisites that the Company provided to Mr. Moffett
in 1996 consisting of (a) $40,000 of matching gifts under the matching
gifts program, (b) $16,256 for financial counseling and tax return
preparation and certification services in 1996, and (c) $66,146 of
additional income recognized for federal income tax purposes by Mr.
Moffett for use of the Company's aircraft.
(5) Includes $63,904 of perquisites that the Company provided to Mr. Adkerson
in 1996 consisting of (a) $40,000 of matching gifts under the matching
gifts program, (b) $3,977 for financial counseling and tax return
preparation and certification services, and (c) $19,927 of additional
income recognized for federal income tax purposes by Mr. Adkerson for use
of the Company's aircraft.
(6) Includes $6,702 for a scholarship that the Company provided in 1996 for
the benefit of Mr. Adkerson's son.
(7) Effective as of January 1, 1997, Mr. Goodyear resigned from the Company
and, pursuant to an agreement described in the section titled "Certain
Transactions," he forfeited two-thirds of the stock options that the
Company granted to him in 1996 and will receive $8,333 per month over a
three-year period.
(8) Includes $79,413, $86,235 and $89,796 of perquisites that the Company
provided to Mr. Machribie in 1996, 1995 and 1994, respectively, consisting
of (a) $60,000 of principal payments of non-interest bearing loans to Mr.
Machribie from the Company that were forgiven in each year, and (b)
$19,413, $26,235 and $29,796 of imputed interest in 1996, 1995 and 1994,
respectively, on such loans.
------------------
13
The following table sets forth information with respect to all stock options
and SARs that the Company granted to each of the Named Executive Officers in
1996.
OPTION/SAR GRANTS IN 1996
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS/SARS EMPLOYEES IN OR BASE EXPIRATION PRESENT
NAME GRANTED(1) 1996 PRICE DATE VALUE(2)
---- ------------ ---------------- -------- ------------- -----------
James R. Moffett 930,000 53.17% $35.50 May 14, 2006 $11,541,300
Rene L. Latiolais 200,000 11.43% 35.50 May 14, 2006 2,482,000
Richard C. Adkerson 250,000 14.29% 35.50 May 14, 2006 3,102,500
Charles W. Goodyear(3) 110,000 6.29% 35.50 May 14, 2006 1,365,100
Adrianto Machribie 5,500 0.31% 32.81 Apr. 30, 2006 60,775
- ---------
(1) The stock options granted to Messrs. Moffett, Latiolais, Adkerson and
Goodyear will become exercisable over a five-year period and the stock
options granted to Mr. Machribie will become exerciseable over a four-year
period. The stock options will become immediately exercisable in their
entirety if (a) any person or group of persons acquires beneficial
ownership of shares representing 20% or more of the Company's total voting
power or (b) under certain circumstances, the composition of the Board of
Directors is changed after a tender offer, exchange offer, merger,
consolidation, sale of assets or contested election or any combination
thereof. Each stock option has an equal number of tandem "limited rights,"
which may be exercisable only for a limited period in the event of a
tender offer, exchange offer, a series of purchases or other acquisitions
or any combination thereof resulting in a person or group of persons
becoming a beneficial owner of shares representing 40% or more of the
Company's total voting power. Each limited right entitles the holder to
receive cash equal to the amount by which the highest price paid in such
transaction exceeds the exercise price.
(2) The Black-Scholes option pricing model was used to determine the grant
date present value of the stock options granted by the Company to the
Named Executive Officers. Under the Black-Scholes option pricing model,
the grant date present value of each stock option and SAR referred to in
the table was calculated to be $11.05 on April 30, 1996 and $12.41 on May
14, 1996. The following facts and assumptions were used in making such
calculations: (a) an unadjusted exercise price for each such stock option
as set forth under the column labeled "Exercise or Base Price;" (b) a fair
market value of $32.8125 and $35.50 for one Class B Common Share on April
30, 1996 and May 14, 1996, respectively; (c) dividend yields of 2.74% and
2.54%, respectively, derived from dividing (i) $0.90, which is the value
of the dividend currently being paid on one Class B Common Share, by (ii)
the fair market value of one Class B Common Share on the dates of grant;
(d) a term for such stock options as set forth under the column labeled
"Expiration Date;" (e) a stock volatility of 25.8%, based on an analysis
of weekly closing stock prices of Class B Common Shares over a 36-week
period; and (f) an
14
assumed risk-free interest rate of 6.61%, such rate being equivalent to the
yield on the dates of grant on a treasury note with a maturity date
comparable to the expiration of such stock option. No other discounts or
restrictions related to vesting or the likelihood of vesting of stock
options were applied. The resulting grant date present value for each stock
option was multiplied by the total number of stock options granted to each
of the Named Executive Officers to determine their total grant date present
values.
(3) Effective January 1, 1997, Mr. Goodyear resigned from the Company and
forfeited two-thirds of these stock options pursuant to an agreement
described in the section titled "Certain Transactions."
-----------------
The following table sets forth information with respect to any exercises of
stock options and SARs in 1996 by each of the Named Executive Officers and all
outstanding Company stock options and SARs held by each of the Named Executive
Officers as of December 31, 1996.
AGGREGATE OPTION/SAR EXERCISES IN 1996
OPTION/SAR VALUES AT DECEMBER 31, 1996
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
SHARES DECEMBER 31, 1996 AT DECEMBER 31, 1996
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------
James R. Moffett 1,680,926 $26,498,910 775,873/930,000 $7,961,578/$ --
Rene L. Latiolais 115,849 1,342,169 595,553/223,781 6,827,022/ 264,223
Richard C. Adkerson 307,746 5,021,634 128,459/307,998 1,315,487/ 590,048
Charles W. Goodyear 221,386 3,509,441 199,372/167,998 2,144,329/ 590,048
Adrianto Machribie 8,414 91,183 2,295/ 11,629 25,499/ 63,159
15
The following table sets forth information with respect to all long-term
incentive plan awards made in 1996 by the Company to each of the Named
Executive Officers.
LONG-TERM INCENTIVE PLANS--AWARDS IN 1996
PERFORMANCE
NUMBER OF OR OTHER ESTIMATED FUTURE
SHARES, PERIOD PAYOUTS UNDER
UNITS OR UNTIL NON-STOCK
OTHER MATURATION PRICE-BASED
NAME RIGHTS(1) OR PAYOUT PLANS(2)
- ---- --------- ----------- ----------------
James R. Moffett 180,000 12/31/99 $1,008,000
Rene L. Latiolais 50,000 12/31/99 280,000
Richard C. Adkerson 75,000 12/31/99 420,000
Charles W. Goodyear 50,000 12/31/99 280,000
Adrianto Machribie 18,000 12/31/99 100,800
- ---------
(1) Represents the number of performance units covered by the Company's
performance awards granted in 1996 under the 1995 Long-Term Performance
Incentive Plan (the "Long-Term Plan"). As of December 31 of each year,
each Named Executive Officer's performance award account will be credited
with an amount equal to the "annual earnings per share" or "net loss per
share" (as defined in the Long-Term Plan) for that year multiplied by the
number of performance units then credited to such performance award
account. Annual earnings per share or net loss per share includes the net
income or net loss of each majority-owned subsidiary of the Company that
is attributable to equity interests that are not owned by the Company. The
Corporate Personnel Committee may, however, in the exercise of its
discretion, prior to crediting the Named Executive Officers' performance
award accounts with respect to a particular year, reduce or eliminate the
amount of the annual earnings per share that otherwise would be credited
to any performance award account for such year. The balance in such
performance award account is generally paid as soon as practicable after
December 31 of the year in which the third anniversary of the award
occurs.
(2) The amounts represent the annual earnings per share for 1996, as
determined by the Corporate Personnel Committee, applied over a four-year
period.
------------------
16
Retirement Benefit Program. The Company's retirement benefit program was
amended effective July 1, 1996, to incorporate a "cash-balance plan" design.
Under the amended program, each participant, including each of the Named
Executive Officers other than Mr. Machribie, is entitled to benefits based
upon the sum of his starting account balance, annual benefit credits and
annual interest credits allocated to his "account." The starting account
balance is equal to the value of the participant's accrued benefit as of June
30, 1996, under the prior plan. The annual benefit credit consists of two
parts: (1) 4% of the participant's earnings for the year in excess of the
social security wage base for the year; and (2) a percentage of the
participant's total earnings for the year. The percentage of total earnings is
determined as follows:
. 15%, if as of January 1, 1997, the participant's age plus service totaled
65 or more, he was at least 50 years old and had at least 10 years of
service;
. 10%, if as of January 1, 1997, the participant's age plus service totaled
55 or more, he had at least 10 years of service, and he did not meet the
requirements for a 15% allocation;
. 7%, if as of January 1, 1997, the participant's age plus service totaled
45 or more, he had at least 5 years of service, and he did not meet the
requirements for a greater allocation;
. 4%, if the participant did not meet the requirements for a greater
allocation.
The annual interest credit is equal to the account balance at the end of the
prior year multiplied by the annual yield on 10-year U.S. Treasury securities
on the last day of the preceding year. For the first half-year of the cash-
balance plan design, ending December 31, 1996, the annual benefit credits were
based on compensation for the second half of the year, and the interest credit
was 2.79% (equal to half the annual yield rate of 5.58%). Interest credits
stop at the end of the year in which the participant reaches age 60. Upon
retirement a participant's account balance is payable either in a lump sum or
an annuity, as selected by the participant. A participant's "earnings" are
comprised of annual base salary (see "Salary" in the Summary Compensation
Table above), plus a percentage of certain bonuses (See "Bonus" in the Summary
Compensation Table above), which percentage is the lesser of 50% or the
percentage of the bonus not deferred. Years of service include not only years
with the Company but also any years with the Company's predecessors.
Benefits payable to a participant under the Company's retirement benefit
program are no longer determined primarily by such individual's final average
compensation and years of service. However, if a participant's age plus
service equalled 65 or more as of January 1, 1997, and as of that date the
participant had both attained age 50 and had at least 10 years of service, the
participant is "grandfathered" into a benefit of no less than the benefit
under the former retirement benefit formula based on years of service and
final average earnings.
The following is the estimated annual retirement benefit, payable as an
annuity for life, of each of the Named Executive Officers (other than Mr.
Machribie who does not participate in the Company's retirement benefit
program), assuming retirement at age 60, and allowing for reasonable
17
annual increases in earnings until retirement: Mr. Moffett, $192,639; Mr.
Adkerson, $272,267; and Mr. Latiolais, $175,352. Mr. Goodyear resigned
effective January 1, 1997 and his estimated annual benefit under the
retirement benefit program, if the benefit is paid as an annuity for life
commencing at age 60, is $31,334.
CORPORATE PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Corporate Personnel Committee is composed of five independent directors,
none of whom is an officer or employee of the Company or any of its
subsidiaries. The Committee met nine times in 1996. The Committee determines
the compensation of the Company's Chief Executive Officer and other executives
(the "Executive Officers") and administers the Company's annual incentive
plan, performance incentive awards program, long-term incentive plans and
stock option plans.
For 1996 the Committee reviewed the results of a comparison of Company
performance relative to a group of mining companies (the "Peer Group"), which
group is comprised of the companies included in the Dow Jones Other Non-
Ferrous Metals Index and the Dow Jones Precious Metals Index. An independent
executive compensation consultant conducted this review to help the Committee
ensure that overall executive compensation levels relate appropriately to
Company performance when compared to performance of the Peer Group. Provided
below in the section entitled "Annual Cash Awards" is a listing of the
financial performance factors covered in this comparison of Company
performance and a summary of the Company's operational and strategic
accomplishments during 1996 that the Committee considered.
The Committee uses the policies described below as a framework for the
compensation programs in which the Executive Officers participate.
Base Salaries
Base salaries of the Executive Officers are established at appropriate
levels after consideration of each executive's responsibilities and market
salaries for similarly situated Executive Officers in other organizations.
Such organizations generally are not included in the Peer Group, but are
organizations whose operational, corporate financing and other activities are
considered comparable to those that the Company accomplished in recent years
under the direction of the Executive Officers. The Committee established base
salaries for the Chief Executive Officer and certain other Executive Officers
who, prior to 1996, were employed by Freeport-McMoRan Inc. (FTX) and provided
services to the Company through a management services agreement. The Company
increased base salaries for certain Executive Officers in 1996 in recognition
of significant changes in their responsibilities during 1996. The Chief
Executive Officer did not receive a base salary increase during 1996.
Annual Cash Awards
The Company's annual incentive plan is designed to provide incentives, in
the form of annual cash awards, to certain Executive Officers whose
performance can have a major impact on the profitability and future growth of
the Company.
18
Under the terms of the annual incentive plan, in which the Chief Executive
Officer participates, no awards will be made for any year if the five-year
average return on investment (generally, consolidated net income divided by
consolidated stockholders' equity and long-term debt, including the minority
interests' share of subsidiaries' income and stockholders' equity) is less
than 6%. During the five-year period ending in 1996, the average return on
investment was 11.5%. When determining the aggregate awards granted under the
annual incentive plan for 1996, the Committee considered as a guideline 2.5%
of net cash provided by operating activities in 1996, which amount is the
maximum that may be awarded under the annual incentive plan to Executive
Officers whose compensation is subject to the limitation on deductible
compensation imposed by Section 162(m) of the Internal Revenue Code ("Section
162(m)").
The Company's performance incentive awards program is designed to provide
incentives in the form of annual cash awards to certain middle managers and
Executive Officers who do not participate in the annual incentive plan. In
1996, each participant in the performance incentive awards program was
assigned a guideline amount, expressed as a percentage of the base salary paid
to such participant, which when combined with base salary, was generally
designed to achieve total annual cash compensation substantially equal to 75th
percentile Peer Group levels. Actual performance incentive awards may range
from zero to a multiple of the guideline amount, with the result being that
the competitive position of total annual cash compensation for participants in
the performance incentive awards program may vary substantially from year to
year depending on performance.
To determine the total amount available for incentive awards in 1996 within
the plan limits and guidelines of both plans described above, the Committee
considered certain Company financial performance factors and operational and
strategic accomplishments achieved in 1996. These performance factors were not
individually weighted.
The financial performance factors included the percentage change in net cash
provided by operating activities over the prior year, the percentage change in
total managed net income (generally, consolidated net income plus the minority
interests' share of subsidiaries' net income) over the prior year, return on
managed equity, and return on investment. Results of these performance factors
for 1996 were compared to the Company's historical results during each of the
last three years, and to the Peer Group's estimated 1996 results and actual
results during the last three years.
Operational and strategic accomplishments of the Company and its
subsidiaries during 1996 considered by the Committee included: (i) the
reduction of cash production costs from $0.241 per pound of copper in 1995 to
$0.168 in 1996; (ii) record production of 1.119 billion pounds of copper and
1.695 million ounces of gold; (iii) average mill throughput of 127,400 metric
tons per day, which was higher than planned capacity; (iv) the receipt of
Government of Indonesia approval for the first-ever joint venture between two
foreign mining companies allowing the Company to proceed with implementation
of its strategic alliance with RTZ-CRA; (v) the receipt of the entire $100
million of exploration funds pledged by RTZ-CRA; (vi) the enlargement of the
Kucing Liar resource to 250
19
million tons, with proved reserves of 82 million tons added during 1996; (vii)
the expansion of the Intermediate Ore Zone (IOZ), the Deep Ore Zone (DOZ) and
the Grasberg pit, adding 79 million tons of reserves; (viii) the completion of
the feasibility study and the commencement of construction for the Number 4
Concentrator expansion which will maximize the Grasberg pit resources and
provide significant flexibility for future underground development; (ix) the
completion of a successful environmental audit by Dames & Moore; (x) the
addition of over 500 Irianese to the workforce; (xi) the implementation of the
Integrated Timika Development Plan; (xii) continued progress in the
development of a new town in Irian Jaya, Kuala Kencana, which is now operating
as the administrative center of the Company's Irian Jaya operations; (xiii)
the implementation of an integrated computer software system resulting in
significant ongoing cost savings; (xiv) the finalization of financing and the
commencement of construction of the Gresik smelter, with an expected
completion date in mid-1998; (xv) the arrangement of a new $1 billion
commercial bank credit facility which increased availability by $250 million
and lowered interest costs by 12.5 basis points; (xvi) the public issuance of
$450 million of long-term senior debt; (xvii) the repurchase through the stock
buy-back program of $221 million of Company common stock during 1996; (xviii)
the monetization of the Company's hedging program with the mid-year drop in
copper price, with proceeds of $97.2 million received from the sale of put
option positions; and (xix) the achievement of the successful commercial
start-up of Atlantic Copper's Huelva smelter expansion in January, 1996, with
the expansion being completed on time and within budget.
After reviewing these performance factors, the Committee concluded that the
Company's overall financial results for 1996 exceeded the Company's 1995
results and exceeded the Peer Group median for the financial factors
considered (with the exception of change in total managed net income), and
that operational and strategic accomplishments exceeded expectations.
Based on its review, the Committee approved an incentive pool for the annual
incentive plan of 1.9% of net cash provided by operating activities, which is
less than the maximum amount permitted under the plan, and each individual
award under the annual incentive plan for 1996 was below the individual award
maximum. Performance awards for those Executive Officers participating in the
performance incentive awards program in 1996 on average approximated 240% of
their guideline amounts. The specific amounts awarded under the annual
incentive plan and the performance incentive awards program to the Company's
five most highly compensated Executive Officers for 1996, including the Chief
Executive Officer, are as shown in the "Summary Compensation Table."
Stock Options and Long-Term Incentives
Stock option and cash long-term incentive award guidelines are intended to
provide a total potential value that is greater than the value of annual cash
compensation to reinforce the importance of shareholder value creation.
Executive Officers are eligible to participate in three long-term incentives:
stock options, freestanding stock appreciation rights ("SARs") and performance
units.
20
Award guidelines for these incentives are expressed as a fixed number of
options, SARs or units that vary according to the position level of each
participating Executive Officer. The guidelines were developed originally by
the Committee and confirmed by a review of compensation practices of the Peer
Group conducted by an independent executive compensation consultant. The total
value of long-term incentive awards is generally intended to produce total
compensation based on future performance that exceeds 75th percentile levels
of the Peer Group for the Executive Officers. Stock options are generally
emphasized over other long-term incentive awards.
The Committee encourages Executive Officers to accumulate significant equity
ownership in the Company by granting stock options. The Committee believes
that large periodic stock option awards rather than smaller, annual awards
provide a more powerful incentive to Executive Officers to achieve sustained
growth in shareholder value over the long term. The exercise price of a stock
option is equal to the fair market value of a share of the Company's Class B
Common Stock on the date of grant. The stock options granted to certain
Executive Officers for 1996, including the Chief Executive Officer, are shown
in the "Summary Compensation Table." No SAR grants were made in 1996 to
Executive Officers.
The Committee supplements stock option grants to Executive Officers with
annual grants of performance units. Performance units are designed to link a
portion of executive compensation to cumulative earnings per share because the
Company believes that sustained profit performance will help support increases
in shareholder value. Each outstanding performance unit is annually credited
with an amount equal to the annual earnings per share as defined in the plan
(generally, consolidated net income (or net loss) per share plus minority
interests' share of net income (or net loss) per share) until the valuation
date for such performance award, which is generally December 31 of the year in
which the third anniversary of the grant occurs. Such credits are generally
paid as soon as practicable after such valuation date. The performance units
granted to certain Executive Officers for 1996, including the Chief Executive
Officer, are shown in the table entitled "Long-Term Incentive Plans--Awards in
1996."
Under Section 162(m) no deduction by a publicly held corporation is allowed
for compensation paid by the corporation to its most highly compensated
executive officers to the extent that the amount of such compensation for the
taxable year for any such individual exceeds $1 million. Section 162(m)
exempts "performance based" compensation from the deduction limitation. The
Company believes that the components of executive compensation that are
inherently performance based should qualify for such exclusion from the
deduction limitation under Section 162(m). Those components consist of annual
cash incentive awards, stock options, SARs and performance units. The Board of
Directors recommended and stockholders approved the Annual Incentive Plan, the
1995 Long-Term Performance Incentive Plan, the 1995 Stock Option Plan, and the
Adjusted Stock Award Plan, which were designed to qualify compensation payable
thereunder for deductibility under Section 162(m). The Company anticipates
that the components of individual executive compensation
21
for each highly compensated Executive Officer that do not qualify for any
exclusion from the deduction limitation of Section 162(m) should not exceed $1
million in any given year for most Executive Officers, and should therefore
qualify for deductibility in most instances.
Robert W. Bruce III, Chairman J. Taylor Wharton
William B. Harrison, Jr. Ward W. Woods, Jr.
George Putnam
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The current members of the Company's Corporate Personnel Committee are
Messrs. Bruce, Harrison, Putnam, Wharton and Woods. No Executive Officer
served in 1996 as a director or member of the compensation committee of
another entity, one of whose executive officers served as a director of the
Company or on the Company's Corporate Personnel Committee.
22
PERFORMANCE GRAPH
The following graph compares the change in the cumulative total stockholder
return on Class A Common Shares from 1992 to July 1995 at which time the Class
B Common Shares were publicly distributed and began trading on the New York
Stock Exchange, and on Class B Common Shares from July 1995 through December
1996 with the cumulative total return of the Standard & Poor's 500 Stock Index
and the cumulative total return of the Dow Jones Other Non-Ferrous Metals
Group Index from 1992 through 1996.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FREEPORT-MCMORAN COPPER & GOLD INC.,
S & P 500 STOCK INDEX AND DOW JONES
OTHER NON-FERROUS METALS GROUP INDEX
[Graph Appears Here]
1991 1992 1993 1994 1995 1996
Freeport-McMoRan Copper & Gold
Inc. $100.00 $137.06 $161.03 $140.34 $191.36 $209.32
S&P 500 Stock Index $100.00 $107.62 $118.46 $120.03 $165.13 $203.05
Dow Jones Other Non-Ferrous
Metals Group Index $100.00 $141.93 $144.29 $187.21 $198.58 $206.56
ASSUMES $100 INVESTED ON DECEMBER
31, 1991 IN FREEPORT- McMoRan COPPER (DIAMOND) FREEPORT-MCMORAN COPPER &
& GOLD INC. CLASS A COMMON STOCK AND GOLD INC.
SUCH CLASS A COMMON STOCK WAS
EXCHANGED FOR CLASS B COMMON STOCK
IN JULY 1995, S&P 500 STOCK INDEX & (CIRCLE) S&P 500 STOCK INDEX
DOW JONES OTHER NON-FERROUS METALS
GROUP INDEX
(SQUARE) DOW JONES OTHER NON-
* TOTAL RETURN ASSUMES FERROUS METALS GROUP INDEX
REINVESTMENT OF DIVIDENDS
23
CERTAIN TRANSACTIONS
During 1996, Mr. Rankin received certain compensation consisting of
reimbursement for a portion of his office rent and the service of an executive
secretary employed by FM Services Company ("FMS"), a corporation 50% owned by
each of the Company and FTX. The aggregate amount of such compensation in 1996
was $86,540. FMS and Mr. Rankin are parties to an agreement, renewable
annually, under which Mr. Rankin renders services to the Company and FTX
relating to finance, accounting and business development. In consideration for
such services, FMS pays Mr. Rankin an annual retainer of $56,000. FMS and a
corporation wholly owned by Mr. Rankin are parties to an arrangement under
which FMS, the Company and FTX are entitled to the use of a Cessna Citation V
Ultra aircraft in which such corporation has an interest. Under the
arrangement, FMS pays charges, assessments and an annual fee to such
corporation that are directly related to the Company's and FTX's use of the
plane and an additional fixed monthly fee. In 1996, FMS paid the corporation
$368,218.
Kissinger Associates, Inc. ("Kissinger Associates"), a corporation of which
Mr. Kissinger is Chairman of the Board and the sole stockholder, and FMS are
parties to agreements (the "Kissinger Consulting Agreements") pursuant to
which Kissinger Associates provides to the Company and FTX advice and
consultation on specified world political, economic, strategic and social
developments affecting the Company's and FTX's affairs. As compensation for
such services, FMS pays Kissinger Associates an annual fee of $200,000,
additional consulting fees based on the services rendered and reasonable out-
of-pocket expenses incurred in connection with providing such services in
proportion to the amount of services received by each. In 1996, FMS paid
Kissinger Associates $200,000 for all services under the Kissinger Consulting
Agreements.
In March 1996, the Company and Mr. Mealey entered into an agreement pursuant
to which Mr. Mealey provides consulting services relating to the Company's
businesses, operations and prospects through March 1, 1999. Under this
agreement, Mr. Mealey receives an annual fee of $630,000 and reimbursement of
reasonable out-of-pocket expenses incurred in connection with rendering such
consulting services. Pursuant to this agreement, Mr. Mealey receives no annual
fee for serving on the Board, no Board attendance fees and no stock options
under the 1995 Plan. During 1996, Mr. Mealey received $525,000 from the
Company for services rendered under this agreement. Also, in 1996 Mr. Mealey
received $100,000 for services rendered as an executive officer of the Company
through February 1996, $57,962 as severance and vacation pay and certain other
compensation as follows: (a) $11,449 for payment of taxes in connection with
certain benefits provided to him, (b) $8,730 for financial counseling and tax
return preparation and certification services, (c) $8,594 for premium payments
for a universal life insurance policy, (d) $5,000 for contributions to a
defined contribution plan and (e) $3,000 in director fees.
Upon his resignation from the Company, FTX, MOXY, Freeport-McMoRan Resource
Partners, Limited Partnership, FMS and FM Properties Inc. (collectively, the
"Freeport Entities"), as of
24
January 1, 1997 Mr. Goodyear forfeited two-thirds of the stock options that
the Freeport Entities granted to him in 1996. The stock options that the
Company granted to Mr. Goodyear in 1996 are shown in the table entitled
"Option/SAR Grants in 1996." In consideration for such forfeiture, Mr.
Goodyear is entitled to receive $8,333 per month from the Freeport Entities
starting on January 1, 1997 and continuing through December 1, 1999. Such
payments may be discontinued or accelerated under certain circumstances if the
consulting arrangement with FMS described below is terminated.
In December 1996, FMS entered into an agreement with Goodyear Capital
Corporation ("GCC"), a corporation of which Mr. Goodyear is President and the
sole stockholder, under which GCC has agreed to provide consulting services
relating to the financial aspects of the businesses, operations and prospects
of FMS and its corporate affiliates, including the Company and FTX, from
January 1, 1997 through December 31, 1999. Under the agreement, GCC will
receive an annual consulting fee of $1,400,000, reimbursement of reasonable
out-of-pocket expenses incurred in connection with providing such services,
certain perquisites, and incentive bonuses, in amounts to be determined, for
providing material assistance to any of the Freeport Entities on any major
transactions that may be successfully consummated. In 1996, Mr. Goodyear
received $15,674 as reimbursement for certain fees incurred in connection with
the negotiation of this agreement.
In January 1997, FMS entered into an agreement with Mr. Johnston under which
Mr. Johnston has agreed to provide consulting services relating to
international relations, energy industry matters and commercial matters to FMS
and its affiliates, including the Company and FTX. Under the agreement, which
is renewable annually, Mr. Johnston will receive an annual consulting fee of
$150,000 (which includes Mr. Johnston's annual fee for serving on the
Company's Board), and reimbursement of reasonable out-of-pocket expenses
incurred in connection with providing such services. In 1996, Mr. Johnston
received no compensation under this arrangement.
RATIFICATION OF THE APPOINTMENT OF AUDITORS
The Board of Directors seeks ratification by the stockholders of the Board's
appointment of Arthur Andersen LLP to act as the independent auditors of the
financial statements of the Company and its subsidiaries for the year 1997.
The Board has not determined what, if any, action would be taken should the
appointment of Arthur Andersen LLP not be ratified. One or more
representatives of the firm will be available at the Meeting to respond to
appropriate questions, and those representatives will also have an opportunity
to make a statement.
25
STOCKHOLDER PROPOSAL
Following is a stockholder proposal that was submitted to the Company
pursuant to Rule 14a-8 of the SEC by the Seattle Mennonite Church, 3120 N.E.
125th St., Seattle, Washington 98125. The proponent states that it is the
beneficial owner of at least 3,000 Class A Common Shares. In accordance with
such rule, the proposal is set forth in full below.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THE
STOCKHOLDER PROPOSAL.
STOCKHOLDER PROPOSAL
Whereas: Since 1967, PT Freeport Indonesia Company (PT-FI), an operating
unit of Freeport McMoRan Copper and Gold, Inc. (FCX) has been operating on
lands traditionally inhabited by indigenous people, especially the Amungme and
Komoro;
Whereas: PT-FI currently discharges over 110,000 tons of tailings per day
into local Irian Jaya rivers and is considering the expansion of milling
operations to exceed 190,000 cubic tons per day. In 1995, prior to a
settlement with PT-FI, the Overseas Private Investment Corporation, a U.S.
government agency which provided political risk insurance to this operation
stated that the mine "created and continues to pose unreasonable or major
environmental, health, or safety hazards with respect to the rivers that are
being impacted by the tailings, the surrounding terrestrial ecosystem and the
local inhabitants";
Whereas: PT-FI has attempted to ameliorate the social and environmental
damages by proposing the "One Percent Trust Fund Offer" and the establishment
of an Amungme Foundation, but the Amungme Tribal Council (LEMASA), an
organization representing one of the indigenous communities affected by PT-
FI's operations in Irian Jaya, has issued a resolution "unconditionally and
absolutely" rejecting these two proposals;
Whereas: It is unclear to shareholders how much environmental liability,
cleanup responsibility, and remediation cost may exist, and no existing audit
contains information on any actual environmental liability.
Resolved: That shareholders request the Board of Directors of PT-FI to take
steps to:
1. Postpone the expansion of milling operations until a just, accepted,
peaceful and permanent resolution of local indigenous concerns can be
reached in consensus-based process with all stakeholders.
2. End company cooperation with the Indonesian military as soon as
legally possible so that PT-FI does not provide food, transportation or
shelter to Indonesian military personnel; and urge Indonesian military to
drastically reduce military presence in and around PT-FI's Contract of Work
area.
26
3. Publicly release in their full entirety the 1996 Labat Anderson social
audit, the March 1996 Dames and Moore environmental audit, and all other
environmental audits on the Indonesian operations from the last five years.
4. Allow independent environmental monitoring of PT-FI operations and
local river and ecosystems by non-governmental organizations.
STATEMENT BY THE BOARD OF DIRECTORS IN OPPOSITIONTO THE STOCKHOLDER PROPOSAL
Your Board of Directors is keenly aware of the Company's environmental and
social obligations in Irian Jaya and believes that the Company is doing an
excellent job of meeting those responsibilities. The Company believes that the
proponent of the foregoing proposal is misinformed and appears to have
accepted at face value the propaganda of certain activist groups who oppose
commercial development in Irian Jaya. Your management's offers to discuss
these issues with the proponent did not lead to meaningful dialogue.
Under the constitution and laws of the Republic of Indonesia, the Government
holds title to all land and natural resources for the benefit of the people.
The Government may grant mining rights to approved companies pursuant to a
"Contract of Work," which has the force of law. PT-FI's mining operations are
governed by a Contract of Work, which grants PT-FI the right to use defined
land areas for exploration and mining activities. In addition to its Contract
of Work, PT-FI has several agreements with indigenous tribes covering the use
of lands historically used by them. Although PT-FI has been advised that all
existing agreements are valid, and that it has no legal obligation to offer
additional compensation, PT-FI recognizes the special relationship that the
local people have with their traditional lands and has, among other things,
recently proposed an initiative that would provide certain of the local people
with additional compensation based on the profitability of the mine. The
initiative was proposed following extensive discussion and review by local
leaders, their advisors, Government representatives and PT-FI. Additional
information about the initiative is contained in the Company's Annual Report
to Stockholders.
The Company's operations in Irian Jaya are subject to comprehensive
regulation by Indonesian environmental authorities and are in material
compliance with all applicable laws, regulations, permits and orders. An
environmental audit conducted by Dames & Moore, an internationally recognized
environmental consulting firm, concluded that PT-FI's comprehensive Tailings
and River Management Plan was the most appropriate method of tailings disposal
available under the circumstances. The Company's arbitration with the Overseas
Private Investment Corporation ("OPIC") was settled shortly after the release
of the Dames & Moore report, at which time OPIC publicly stated that it was
encouraged by the Company's "willingness to undertake the voluntary study and
its continuing efforts to manage the environmental impact of the mine."
As part of its settlement with OPIC, the Company agreed to establish a mine
closure fund and to make annual contributions to the fund so that it will
accumulate a total of $100 million by the end
27
of the mine's life. The first annual contribution to the fund was made in
1996. The Company accounts for mine closure and remediation expenses in
accordance with United States generally accepted accounting principles.
Although LEMASA, one of eight yayasans (foundations) representing indigenous
tribes in the area of PT-FI's operations, has rejected certain programs
proposed by PT-FI for the benefit of the indigenous people, the other seven
representative yayasans have accepted and are participating in these programs.
The Company's commercial operations and social programs have brought modern
employment, education, sanitation, housing, medicine and social services to
the area. In addition, the Company's operations employ sophisticated,
comprehensive environmental management and monitoring programs to back up its
strong commitment to responsible stewardship of the environment in which it
operates.
Your Board believes that adoption of the foregoing proposal would be a
disservice to the Company, its stockholders and the people of Irian Jaya, as
compliance with the proposal would substantially damage the Company's future
operating results and stockholder values, would harm its relations with
Indonesian authorities, and would reduce employment opportunities in Irian
Jaya. More specifically, postponement of the mine expansion to optimal
throughput rates, which is currently under way, would idle a $960 million
project, dramatically increasing its overall cost, delaying indefinitely any
opportunity to earn a return on that investment, and eliminating many
attractive employment opportunities for local residents. Furthermore, ending
cooperation with Indonesian authorities is not legally permissible under PT-
FI's Contract of Work, and any effort to do so would damage the Company's
relations with the Government. Any "drastic" reduction of military presence in
the Company's operating area could affect the safety of Company personnel as
well as local residents. The Company has neither the authority nor the
expertise to advise local authorities on such matters. Additionally, the
preliminary social audit report produced by the internationally recognized
consulting firm of Labat Anderson (which is the only report issued by Labat
Anderson to date) and the Dames & Moore environmental audit report have been
released publicly and are available to any stockholder who requests them. No
other outside audits of PT-FI's environmental or social programs have been
conducted in the past five years. Finally, the Company does not believe that
environmental monitoring by self-appointed experts is constructive or
warranted. Such monitoring should be, and has been, carried out responsibly
and effectively under the auspices of the Government.
ACCORDINGLY, YOUR BOARD OF DIRECTORS UNANIMOUSLY URGES YOU TO VOTE AGAINST
THE FOREGOING PROPOSAL.
28
FREEPORT-MCMORAN COPPER & GOLD INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
STOCKHOLDERS, APRIL 29, 1997
The undersigned hereby appoints James R. Moffett, Rene L. Latiolais, and
Richard C. Adkerson as proxies, with full power of substitution, to vote the
shares of the undersigned in Freeport-McMoRan Copper & Gold Inc. at the Annual
Meeting of Stockholders to be held on Tuesday, April 29, 1997, at 9:00 a.m.,
and at any adjournment thereof, on all matters coming before the meeting. THE
PROXIES WILL VOTE: (1) AS YOU SPECIFY ON THE BACK OF THIS CARD, (2) AS THE
BOARD OF DIRECTORS RECOMMENDS WHERE YOU DO NOT SPECIFY YOUR VOTE ON A MATTER
LISTED ON THE BACK OF THIS CARD, AND (3) AS THE PROXIES DECIDE ON ANY OTHER
MATTER.
If you wish to vote on all matters as the Board of Directors recommends,
please sign, date and return this card. If you wish to vote on items
individually, please also mark the appropriate boxes on the back of this card.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
(continued on reverse side)
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FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
"A" SHARES - YELLOW STRIPE
Please
mark
your
votes
as
indicated
in
this
example
X
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR: THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST:
FOR WITHHELD FOR AGAINST ABSTAIN
ITEM 1--Election of the ITEM 3--Stockholder proposal
nominee for director. regarding Indonesian
Nominee for director operations.
of Freeport-McMoRan
Copper & Gold Inc.
J. Taylor Wharton
FOR, EXCEPT WITHHELD FROM:
___________________________________
(Write nominee name(s) in the
space provided above to withhold
authority.)
FOR AGAINST ABSTAIN
ITEM 2--Ratification of
appointment of
Arthur Andersen
LLP as
independent
auditors.
SIGNATURE(S) _______________________________________________________ DATED:_____________ 1997
YOU MAY SPECIFY YOUR VOTES BY MARKING THE APPROPRIATE BOXES ON THIS SIDE.
YOU NEED NOT MARK ANY BOXES, HOWEVER, IF YOU WISH TO VOTE ALL ITEMS IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION. IF YOUR VOTES ARE
NOT SPECIFIED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE NOMINEE FOR
DIRECTOR, FOR PROPOSAL 2 AND AGAINST PROPOSAL 3.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(BACK)
FREEPORT-MCMORAN COPPER & GOLD INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF
STOCKHOLDERS, APRIL 29, 1997
The undersigned hereby appoints James R. Moffett, Rene L. Latiolais, and
Richard C. Adkerson as proxies, with full power of substitution, to vote the
shares of the undersigned in Freeport-McMoRan Copper & Gold Inc. at the Annual
Meeting of Stockholders to be held on Tuesday, April 29, 1997, at 9:00 a.m.,
and at any adjournment thereof, on all matters coming before the meeting. THE
PROXIES WILL VOTE: (1) AS YOU SPECIFY ON THE BACK OF THIS CARD, (2) AS THE
BOARD OF DIRECTORS RECOMMENDS WHERE YOU DO NOT SPECIFY YOUR VOTE ON A MATTER
LISTED ON THE BACK OF THIS CARD, AND (3) AS THE PROXIES DECIDE ON ANY OTHER
MATTER.
If you wish to vote on all matters as the Board of Directors recommends,
please sign, date and return this card. If you wish to vote on items
individually, please also mark the appropriate boxes on the back of this card.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
(continued on reverse side)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
"B" SHARES - SALMON STRIPE
Please
mark
your
votes
as
indicated
in
this
example
X
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR: THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST:
FOR WITHHELD FOR AGAINST ABSTAIN
ITEM 1--Election of the ITEM 3--Stockholder
nominees for directors. proposal regarding
Nominees for Indonesian
directors of operations.
Freeport-McMoRan
Copper & Gold Inc.
William B. Harrison, Jr. Henry A. Kissinger
J. Bennett Johnston Rene L. Latiolais
FOR, EXCEPT WITHHELD FROM:
________________________________________________________________
(Write nominee name(s) in the space provided above to withhold
authority.)
FOR AGAINST ABSTAIN
ITEM 2--Ratification of
appointment of
Arthur Andersen
LLP as
independent
auditors.
SIGNATURE(S) _________________________________________________________ DATED: __________________ 1997
YOU MAY SPECIFY YOUR VOTES BY MARKING THE APPROPRIATE BOXES ABOVE. YOU NEED
NOT MARK ANY BOXES, HOWEVER, IF YOU WISH TO VOTE ALL ITEMS IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATION. IF YOUR VOTES ARE NOT
SPECIFIED, YOUR SHARES WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR
DIRECTORS, FOR PROPOSAL 2 AND AGAINST PROPOSAL 3.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(BACK)
DEPOSITARY RECEIPTS EVIDENCING DEPOSITARY SHARES REPRESENTING PREFERRED SHARES
OF
FREEPORT-MCMORAN COPPER & GOLD INC.
VOTING INSTRUCTIONS FOR ANNUAL MEETING OF
STOCKHOLDERS, APRIL 29, 1997
The undersigned hereby instructs ChaseMellon Shareholder Services, L.L.C., as
Depositary under the Deposit Agreement pertaining to Depositary Shares (the
"Depositary Shares") representing shares of certain preferred stock (the
"Stock") of Freeport-McMoRan Copper & Gold Inc. (the "Company"), to vote the
shares of Stock represented by Depositary Shares evidenced by Depositary
Receipts issued by the Depositary in the name of the undersigned at the Annual
Meeting of Stockholders to be held on Tuesday, April 29, 1997, at 9:00 a.m.,
and at any adjournment thereof, on all matters coming before the meeting with
respect to which the owners of shares of Stock are entitled to vote. THE
DEPOSITARY WILL (1) VOTE AS YOU SPECIFY ON THE BACK OF THIS CARD OR (2) ABSTAIN
FROM VOTING WHERE YOU DO NOT SPECIFY YOUR VOTE ON THE MATTER LISTED ON THE BACK
OF THIS CARD.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY IN THE ENCLOSED ENVELOPE
- --------------------------------------------------------------------------------
(continued on reverse side)
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FOLD AND DETACH HERE
STEP-UP PREFERRED - GREEN-BROKEN;
GOLD I PREFERRED - BLUE-BROKEN;
GOLD II PREFERRED - PURPLE-BROKEN;
SILVER PREFERRED - PINK-BROKEN
Please
mark
your
votes
as
indicated
in
this
example
X
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR:
FOR WITHHELD
ITEM 1--Election of the
nominee for director.
Nominee for director
of Freeport-McMoRan
Copper & Gold Inc.
J. Taylor Wharton
FOR, EXCEPT WITHHELD FROM:
______________________________________________________________
(Write nominee name(s) in the space provided above to withhold
authority.)
SIGNATURE(S) _________________________________________________________ DATED: _________________ 1997
YOU MAY SPECIFY YOUR VOTE BY MARKING THE APPROPRIATE BOX ABOVE. IF YOUR
VOTE IS NOT SPECIFIED, YOUR SHARES WILL BE COUNTED AS HAVING ABSTAINED FROM
VOTING.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
(BACK)