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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(AMENDMENT NO. 7)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
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CYPRUS AMAX MINERALS COMPANY
(NAME OF SUBJECT COMPANY)
CYPRUS AMAX MINERALS COMPANY
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, NO PAR VALUE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
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232809 10 3 (COMMON STOCK)
(CUSIP NUMBER OF CLASS OF SECURITIES)
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PHILIP C. WOLF, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CYPRUS AMAX MINERALS COMPANY
9100 EAST MINERAL CIRCLE
ENGLEWOOD, COLORADO 80112
(303) 643-5000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF THE PERSON FILING STATEMENT)
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COPY TO:
ELLIOTT V. STEIN, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
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This statement amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 of Cyprus Amax Minerals Company, a Delaware
corporation ("Cyprus Amax"), filed with the Securities and Exchange Commission
(the "Commission") on September 9, 1999, as subsequently amended (the "Schedule
14D-9"), with respect to the exchange offer made by Phelps Dodge Corporation, a
New York corporation ("Phelps Dodge"), to exchange a combination of cash and
Phelps Dodge common stock, par value $6.25 per share ("Phelps Dodge Common
Stock"), for all of the outstanding shares of Cyprus Amax common stock, no par
value ("Cyprus Amax Common Stock"), on the terms and conditions set forth in the
Phelps Dodge Offer.
Capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Schedule 14D-9.
ITEM 2. TENDER OFFER OF THE BIDDER.
Pursuant to an Agreement and Plan of Merger, dated as of September 30,
1999, among Phelps Dodge, CAV Corporation (the "Purchaser") and Cyprus Amax (the
"Phelps Dodge Merger Agreement"), providing for the merger (the "Phelps Dodge
Merger") of the Company with and into the Purchaser, the Purchaser has amended
the Phelps Dodge Offer (the Phelps Dodge Offer as amended being herein referred
to as the "Amended Offer") to (a) increase the price to be paid pursuant to the
Phelps Dodge Offer and (b) amend the conditions of the Phelps Dodge Offer to
conform to the conditions set forth as Annex A to the Phelps Dodge Merger
Agreement.
ITEM 3. IDENTITY AND BACKGROUND.
THE MERGER AGREEMENT
THE AMENDED OFFER
Conditions. Phelps Dodge's obligation to complete the Phelps Dodge Offer
is subject to the following conditions:
- a majority of the outstanding shares of Cyprus Amax shall have been
tendered and not withdrawn (the "Minimum Condition");
- the approval by Phelps Dodge stockholders of the issuance of Phelps Dodge
Common Stock in the Amended Offer and the Phelps Dodge Merger;
- such shares of Phelps Dodge Common Stock shall have been authorized for
listing on the NYSE, subject to official notice of issuance;
- the effectiveness of the registration statement for such Phelps Dodge
Common Stock;
- no legal restraint such as an injunction shall be in effect that would
prevent consummation of the Amended Offer;
- no change in tax law that would be inconsistent with the Phelps Dodge
Merger qualifying as a reorganization under Section 368(a) of the Code;
- accuracy of representations and warranties of Cyprus Amax, unless failure
to be accurate would not reasonably be expected to have a material
adverse effect on Cyprus Amax; and
- compliance by Cyprus Amax in all material respects with material
agreements and covenants in the Phelps Dodge Merger Agreement.
Phelps Dodge has agreed that, without the prior written consent of Cyprus
Amax, no change may be made to the Minimum Condition or which decreases the
price per share of Cyprus Amax Common Stock payable in the Amended Offer, which
changes the form of consideration payable in the Amended Offer, which reduces
the maximum number of shares of Cyprus Amax Common Stock to be acquired in the
Amended Offer, which imposes conditions to the Amended Offer in addition to
those set forth in the Merger Agreement, or which amends any other term of the
Amended Offer in any manner adverse to the holders of the Cyprus Common Stock.
Without the prior written consent of Cyprus, Parent will not waive the Minimum
Condition if, as a result, Purchaser would acquire less than a majority of the
Cyprus Amax Common Stock outstanding.
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Election Procedures. Each holder of Cyprus Amax Common Stock shall be
entitled, with respect to each share of Cyprus Amax Common Stock held by such
holder, to elect to receive either $20.54 per share (the "Cyprus Cash
Consideration") or 0.3500 of a share of Phelps Dodge Common Stock (the "Cyprus
Stock Consideration"). Cyprus Amax shares that are validly tendered and not
withdrawn and (i) covered by elections to receive the Cyprus Cash Consideration
are "Cyprus Cash Election Shares", (ii) covered by elections to receive the
Cyprus Stock Consideration are "Cyprus Stock Election Shares" and (iii) not
covered by a valid election to receive either the Cyprus Cash Consideration or
the Cyprus Stock Consideration are "Cyprus Non-Electing Shares".
If the aggregate Cyprus Cash Consideration elected in respect of all Cyprus
Cash Election Shares exceeds $7.61176875 multiplied by the total number of
shares of Cyprus Amax Common Stock outstanding immediately prior to closing of
the Amended Offer (the "Cyprus Maximum Cash Consideration"), the following will
occur:
- each Cyprus Cash Election Share will be exchanged in the Amended Offer
for (i) $20.54 multiplied by a fraction (the "Cyprus Cash Proration
Factor"), the numerator of which is the Cyprus Maximum Cash Consideration
and the denominator of which is the number of Cyprus Cash Election Shares
multiplied by $20.54, and (ii) a number of shares of Phelps Dodge Common
Stock equal to 0.3500 multiplied by 1 minus the Cyprus Cash Proration
Factor; and
- each Cyprus Stock Election Share and each Cyprus Non-Electing Share will
be exchanged for 0.3500 of a share of Phelps Dodge Commons Stock.
If the aggregate Cyprus Stock Consideration elected in respect of all
Cyprus Stock Election Shares exceeds 0.2203 multiplied by the total number of
shares of Cyprus Amax Common Stock outstanding immediately prior to closing of
the Amended Offer (the "Cyprus Maximum Stock Consideration"), the following will
occur:
- each Cyprus Stock Election Share will be exchanged in the Amended Offer
for (i) a number of shares of Phelps Dodge Common Stock equal to 0.3500
multiplied by a fraction (the "Cyprus Stock Proration Factor"), the
numerator of which is the Cyprus Maximum Stock Consideration and the
denominator of which is the number of Cyprus Stock Election Shares
multiplied by 0.3500, and (ii) cash in an amount equal to $20.54
multiplied by 1 minus the Cyprus Stock Proration Factor; and
- each Cyprus Cash Election Share and each Cyprus Non-Electing Share will
be exchange for $20.54, without interest.
If there is not an excess in cash or stock election, the following will
occur:
- each Cyprus Cash Election Share will be exchanged for $20.54 in cash
without interest; and
- each Cyprus Stock Election Share will be exchanged for 0.3500 of a share
of Phelps Dodge Common Stock.
Each Cyprus Non-Electing Share will be exchanged for (i) an amount in cash
without interest equal to $20.54 multiplied by a fraction (the "Cyprus
Non-Electing Proration Factor"), the numerator of which is the difference
between the Cyprus Cash Number (as hereinafter defined) less the number of
Cyprus Cash Election Shares and the denominator of which is the number of Cyprus
Non-Electing Shares; and (ii) a number of shares of Phelps Dodge Common Stock
equal to 0.3500 multiplied by 1 minus the Cyprus Non-Electing Proration Factor.
The Cyprus Cash Number is determined by dividing the Cyprus Maximum Cash
Consideration by $20.54.
Expiration or Termination of Amended Offer. Phelps Dodge has agreed that,
without the prior written consent of Cyprus Amax, it shall not terminate or
withdraw the Amended Offer or extend the expiration date of the Amended Offer
unless at the expiration date of the Amended Offer the conditions to the Amended
Offer shall not have been satisfied or earlier waived. If, at the expiration
date of the Amended Offer, the
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conditions to the Amended Offer shall not have been satisfied or earlier waived
but there is a reasonable possibility that such conditions may be satisfied
prior to March 31, 2000, Phelps Dodge shall extend the expiration date of the
Amended Offer for an additional period or periods of time, each of which being
no longer than five business days, until the date such conditions are satisfied
or earlier waived and Phelps Dodge becomes obligated to accept for payment and
pay for shares of Cyprus Amax Common Stock tendered pursuant to the Amended
Offer; provided, however, that if the condition to the Amended Offer relating to
a material breach by Cyprus Amax has not been satisfied at the expiration date
and Phelps Dodge has given notice of the breach that has caused such condition
not to be satisfied, Phelps Dodge shall have no further obligation to extend the
expiration date of the Amended Offer if such breach has not been cured within 30
days of such notice.
FORM OF MERGER
If all the conditions to the merger are satisfied or waived in accordance
with the merger agreement, the Purchaser, a wholly owned subsidiary of Phelps
Dodge, will merge with Cyprus Amax, with the Purchaser surviving (the "Surviving
Corporation"). As a result of the merger, the identity and separate existence of
Cyprus Amax shall cease. The Phelps Dodge Merger will become effective when the
applicable certificate of merger is filed with the Secretary of State of the
State of Delaware. It is currently anticipated that the Phelps Dodge Merger will
become effective during the fourth quarter of 1999.
CONSIDERATION TO BE RECEIVED IN THE MERGER
At the time the Phelps Dodge Merger becomes effective:
CONVERSION OF CYPRUS AMAX COMMON STOCK. Subject to no fractional shares
being issued, each issued and outstanding share of Cyprus Amax Common Stock
(other than shares to be canceled in accordance with the Phelps Dodge Merger
Agreement) shall be converted into the Cyprus Stock Consideration, the Cyprus
Cash Consideration or a combination thereof, determined pursuant to provisions
of the Phelps Dodge Merger Agreement (such consideration is referred to herein
as the "Merger Consideration"). If there is an excess of cash elections with
respect to the Amended Offer, each outstanding share of Cyprus Amax Common Stock
will be converted in the Phelps Dodge Merger into the right to receive the
Cyprus Amax Stock Consideration. If there is an excess of stock elections with
respect to the Amended Offer, each outstanding share of Cyprus Amax Common Stock
will be converted in the Phelps Dodge Merger into the right to receive the
Cyprus Amax Cash Consideration. If there is not an excess in cash or stock
election, each outstanding share of Cyprus Amax Common Stock will be converted
in the Phelps Dodge Merger into (i) an amount of cash equal to the Cyprus Amax
Merger Cash Amount (as hereinafter defined), without interest, and (ii) a number
of shares of Phelps Dodge Common Stock equal to the Cyprus Amax Merger Stock
Amount (as hereinafter defined). The Cyprus Amax Merger Cash Amount and the
Cyprus Amax Merger Stock Amount will be determined as follows:
1. The aggregate amount of Cyprus Amax Cash Consideration actually
paid in the Amended Offer will be subtracted from the Total Cyprus Amax
Available Cash (as hereinafter defined) to determine the amount of cash
available to be paid in the Phelps Dodge Merger (the "Aggregate Cyprus Amax
Merger Cash Consideration"). Total Cyprus Amax Available Cash equals (i)
the number of shares of Cyprus Amax Common Stock exchanged in the Amended
Offer plus the number of shares of Cyprus Amax Common Stock to be converted
in the Phelps Dodge Merger, multiplied by (ii) $7.61176875.
2. The Aggregate Cyprus Amax Merger Cash Consideration will be
divided by the number of shares of Cyprus Amax Common Stock to be converted
in the Phelps Dodge Merger, to determine the amount of cash consideration
to be paid in respect of each such share of Cyprus Amax Common Stock in the
Phelps Dodge Merger (the "Cyprus Amax Merger Cash Amount").
3. The aggregate number of shares of Phelps Dodge Common Stock
actually issued as Cyprus Amax Stock Consideration in the Amended Offer
will be subtracted from the Total Cyprus Amax Available Stock (as
hereinafter defined) to determine the number of shares of Phelps Dodge
Common Stock available to be paid in the Phelps Dodge Merger (the
"Aggregate Cyprus Amax Merger Stock
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Consideration"). Total Cyprus Amax Available Stock equals (i) the number of
shares of Cyprus Amax Common Stock exchanged in the Amended Offer plus the
number of shares of Cyprus Amax Common Stock to be converted in the Phelps
Dodge Merger, multiplied by (ii) 0.2203.
4. The Aggregate Cyprus Amax Merger Stock Consideration will be
divided by the number of shares of Cyprus Amax Common Stock to be converted
in the Phelps Dodge Merger, to determine the number of shares of Phelps
Dodge Common Stock to be issued in respect of each such share of Cyprus
Amax Common Stock in the Phelps Dodge Merger (the "Cyprus Amax Merger Stock
Amount").
As of the effective time of the Phelps Dodge Merger, all such shares of
Cyprus Amax Common Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
holder of a certificate or certificates which immediately prior to the
effective time represented outstanding shares of Cyprus Amax Common Stock
shall cease to have any rights with respect thereto, except the right to
receive (x) if the Merger Consideration includes Phelps Dodge Common Stock,
(i) Phelps Dodge certificates, (ii) certain dividends and other
distributions in accordance with the Phelps Dodge Merger Agreement, and
(iii) cash instead of fractional shares of Phelps Dodge Common Stock in
accordance with the Phelps Dodge Merger Agreement, without interest, and
(y) if the Merger Consideration includes cash, the appropriate cash
amounts.
EXCHANGE AGENT; PROCEDURES FOR EXCHANGE OF CERTIFICATES
EXCHANGE AGENT. At the time the Phelps Dodge Merger becomes effective,
Phelps Dodge shall enter into an agreement with a bank or trust company that is
satisfactory to Cyprus Amax to act as the exchange agent. Phelps Dodge shall
deposit with the exchange agent cash and certificates representing the number of
whole shares of Phelps Dodge Common Stock issuable or payable pursuant to the
Phelps Dodge Merger Agreement in exchange for outstanding shares of Cyprus Amax
Common Stock. Soon after the completion of the Phelps Dodge Merger, Phelps Dodge
will send a letter to each person who was a Cyprus Amax stockholder at the time
the Phelps Dodge Merger became effective. The letter will contain instructions
on how to surrender Cyprus Amax stock certificates to the exchange agent and
receive shares of Phelps Dodge and cash. See "-- Consideration to Be Received in
the Merger."
DIVIDENDS. Holders of Cyprus Amax Common Stock will not be entitled to
receive any dividends or other distributions payable by Phelps Dodge until they
exchange their Cyprus Amax stock certificates for certificates representing
shares of Phelps Dodge Common Stock. Once they deliver their Cyprus Amax stock
certificates to the exchange agent, those stockholders will receive, subject to
applicable laws, accumulated dividends and distributions, without interest.
FRACTIONAL SHARES. No fractional shares of Phelps Dodge Common Stock will
be issued upon the surrender of certificates representing shares of Cyprus Amax
Common Stock. No dividend or other distribution of Phelps Dodge will relate to
any such fractional shares and no such fractional shares will entitle the owner
thereof to any voting or other rights of a stockholder of Phelps Dodge.
Holders of Cyprus Amax Common Stock otherwise entitled to fractional shares
of Phelps Dodge Common Stock will receive a cash payment instead of such
fractional shares. Following the effective time, the exchange agent will
determine the excess of the number of whole shares of Phelps Dodge Common Stock
delivered to the exchange agent by Phelps Dodge for distribution to Cyprus Amax
stockholders over the aggregate number of whole shares of Phelps Dodge Common
Stock to be distributed to Cyprus Amax stockholders. The exchange agent will
then, on behalf of the former stockholders of Cyprus Amax, sell the excess
shares at then prevailing prices on the New York Stock Exchange, all in the
manner provided in the Phelps Dodge Merger Agreement.
As soon as practicable after the determination of the amount of cash to be
paid to holders of Cyprus Amax Common Stock with respect to any fractional share
interests, the exchange agent will make available such amounts to such holders
of Cyprus Amax stock subject to and in accordance with the terms of the Phelps
Dodge Merger Agreement.
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DISSENTING SHARES. Shares of Cyprus Amax Common Stock that are outstanding
immediately prior to the time the Phelps Dodge Merger becomes effective and
which are held by persons who have properly demanded appraisal for their shares
in accordance with Section 262 of the Delaware General Corporation Law shall not
be converted into the right to receive the Merger Consideration. Such persons
shall be entitled to receive payment of the appraised value of such shares.
SURVIVING CORPORATION FOLLOWING THE MERGER
NAME OF SURVIVING CORPORATION. The name of the surviving corporation from
and after the effective time of the Phelps Dodge Merger (the "effective time")
shall be "Cyprus Amax Minerals Company" until changed or amended in accordance
with applicable Law.
CHARTER DOCUMENTS. At the effective time, the certificate of incorporation
and the bylaws of the Purchaser, as in effect immediately prior to the effective
time, shall be the certificate of incorporation and bylaws, respectively, of the
Surviving Corporation.
DIRECTORS AND OFFICERS. The directors of the Purchaser at the effective
time shall be the directors of the Surviving Corporation until their respective
successors are duly elected and qualified, as the case may be. The officers of
the Purchaser at the effective time shall be the officers of the Surviving
Corporation until their respective successors are duly appointed.
REPRESENTATIONS AND WARRANTIES IN THE PHELPS DODGE MERGER AGREEMENT
In the Phelps Dodge Merger Agreement both parties make representations and
warranties to each other about their companies with respect to, among other
things:
- their organization, existence, good standing, corporate power,
subsidiaries and similar corporate matters;
- their capitalization;
- their authorization, execution, delivery and performance and the
enforceability of the Phelps Dodge Merger Agreement and related matters;
- the recommendation by their boards of directors to their stockholders of
the Phelps Dodge Merger Agreement and the transactions contemplated
thereby;
- the absence of conflicts, defaults or violations under their certificates
of incorporation and bylaws, certain other agreements and laws as a
result of the contemplated transactions, and related matters;
- filings with the SEC and the accuracy and completeness of the information
contained in such filings;
- environmental matters;
- employee benefit matters;
- the Phelps Dodge prospectus, the Phelps Dodge proxy statement, the
registration statement and other SEC filings and the accuracy of the
information contained therein;
- the inapplicability of the Cyprus Amax stockholder rights plan to the
merger;
- tax matters;
- the receipt of fairness opinions from each party's financial advisors;
- required stockholder approvals with respect to the contemplated
transactions;
- the absence of certain material changes in each party's respective
businesses since December 31, 1998;
- the absence of undisclosed material liabilities;
- labor relations; and
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- no prior activities conducted by Purchaser.
All representations and warranties of Phelps Dodge and Cyprus Amax expire
at the time the Phelps Dodge Merger becomes effective.
COVENANTS IN THE PHELPS DODGE MERGER AGREEMENT
The Phelps Dodge Merger Agreement provides that, until the Phelps Dodge
Merger has been completed, neither of Phelps Dodge or Cyprus Amax will take
certain actions without the consent of the other party or as otherwise permitted
by the Phelps Dodge Merger Agreement. More specifically, the parties have agreed
to the following with respect to themselves and, where applicable, their
subsidiaries, except as otherwise permitted by the Phelps Dodge Merger
Agreement:
- Conduct of Operations. The parties will conduct their business
operations according to their ordinary and usual course of business in
substantially the same manner as conducted prior to the Phelps Dodge
Merger Agreement.
- Preserve Organizations. The parties will use their reasonable best
efforts to preserve intact their business organizations and goodwill,
keep available the services of their current officers and other key
employees, and preserve their business relationships.
- Parties to Confer. The parties will confer with each other and report on
material operational matters and the general status of ongoing
operations.
- Notice of Certain Events. The parties will notify each other of certain
changes or events which would have a material adverse effect on Phelps
Dodge or Cyprus Amax, as the case may be.
- Dividends and Reclassifications. The parties will not declare or pay any
dividends on or make any distribution with respect to their outstanding
shares of stock other than regular quarterly dividends on, in the case of
Phelps Dodge, its common stock, and, in the case of Cyprus Amax, its
common stock and preferred stock, and they will not split, combine or
reclassify any shares of their capital stock.
- Amendments to Plans. The parties will not enter into or amend their
employee benefit plans or employment agreements, except in the ordinary
course of business consistent with past practice, as otherwise provided
in the Phelps Dodge Merger Agreement or as required by law.
- Business Combinations; Assets. The parties will not enter into any
business combinations, acquisitions or dispositions of material amounts
of assets or securities, or release any material contract rights, in each
case not in the ordinary course of business.
- Governing Documents. The parties will not propose or adopt any
amendments to their corporate charters or bylaws.
- Issuance of Capital Stock. The parties will not issue or authorize the
issuance of any shares of their capital stock of any class, except that
each is permitted to issue shares of common stock upon the exercise of
stock options or other rights outstanding on the date of the Phelps Dodge
Merger Agreement and in accordance with the terms of such options or
other rights in effect on the date of the Phelps Dodge Merger Agreement.
- Repurchase of Stock. The parties will not purchase or redeem any shares
of their stock or any rights, warrants or options to acquire any such
shares, except in the ordinary course of business in connection with
employee incentive and benefit plans or arrangements in existence on the
date of the Phelps Dodge Merger Agreement.
- Indebtedness. The parties will not incur, assume or prepay any
indebtedness or other material liabilities, other than indebtedness with
a wholly owned subsidiary or between wholly owned subsidiaries.
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- Properties and Assets. The parties will not sell, lease, mortgage or
otherwise encumber or subject to any lien or otherwise dispose of any of
their properties or assets (including securitizations), other than in the
ordinary course of business consistent with past practice.
- Tax Treatment. The parties will not take any actions that would
reasonably be expected to cause the Phelps Dodge Merger not to constitute
transactions described in Section 368(a) of the Internal Revenue Code.
- Tax Election. The parties will not make any material tax election or
settle or compromise any material tax liability, other than in the
ordinary course of business consistent with past practice. Cyprus Amax
may make an election under Section 338(h)(10) of the tax code relating to
the completed sale of Cyprus Amax Coal Company.
- Agree to Take Actions. The parties agree not to take any of the
foregoing actions or take any action which would:
- make any of the representations or warranties contained in the Phelps
Dodge Merger Agreement untrue or incorrect, or
- result in any of the conditions to the Phelps Dodge Merger set forth in
the Phelps Dodge Merger Agreement not being satisfied.
- Investigation. The parties have agreed that, subject to applicable laws
or regulations, prior to the time the Phelps Dodge Merger becomes
effective the parties will afford one another's authorized
representatives full and complete access to each party's properties,
books, contracts, commitments and records and any document filed or
received by them pursuant to applicable securities laws. Also, the
parties will each use their reasonable best efforts to cause their
representatives to furnish promptly to one another any additional
information about their respective businesses and properties as the other
or its duly authorized representatives may reasonably request. However,
neither will be required to disclose information to the other that would
cause significant competitive harm to the disclosing party or its
affiliates if the Phelps Dodge Merger is not completed. All confidential
information obtained by Phelps Dodge or Cyprus Amax will be kept
confidential. Confidential information will be used only in connection
with consummating the transactions contemplated by the Phelps Dodge
Merger Agreement.
STOCKHOLDER APPROVALS AND OTHER COOPERATION
The parties have agreed to:
- prepare and file with the SEC, as soon as is reasonably practicable, an
information statement to be sent to Cyprus Amax after the Amended Offer;
- use reasonable best efforts to have the information statement cleared by
the SEC;
- amend as necessary the registration statement of which this prospectus is
a part;
- as soon as is reasonably practicable, take all actions required under
state blue sky or securities laws in connection with the issuance of
shares of Phelps Dodge Common Stock in the Phelps Dodge Merger;
- promptly prepare and file stock exchange listing applications covering
the shares of Phelps Dodge Common Stock issuable under the Phelps Dodge
Merger Agreement and use their reasonable best efforts to obtain, prior
to the time the Phelps Dodge Merger becomes effective, approval for the
listing of Phelps Dodge Common Stock, subject only to official notice of
issuance;
- cooperate with one another in order to lift any injunctions or remove any
other impediment to the consummation of the contemplated transactions;
and
- cooperate with one another in obtaining opinions of Shearman & Sterling,
special counsel to Phelps Dodge, and Wachtell, Lipton, Rosen & Katz,
special counsel to Cyprus Amax, concerning certain tax matters.
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Each party has also agreed:
- that Cyprus Amax will cause the information statement to be mailed to its
stockholders as promptly as practicable after it is cleared by the SEC;
- as soon as practicable following the date of the Phelps Dodge Merger
Agreement, to duly call and hold a meeting of its stockholders to obtain
approval of the Phelps Dodge Merger and the other contemplated
transactions;
- subject to its ability to change its recommendation as described under
"--No Solicitation of Alternative Takeover Proposals" below, through its
boards of directors, to recommend to its stockholders that it approves
the Phelps Dodge Merger and the other contemplated transactions;
- to use its best efforts to hold its stockholders meetings as soon as
practicable after the date of the Phelps Dodge Merger Agreement;
- that Phelps Dodge shall vote, or cause to be voted, all of the Cyprus
Amax Common Stock then owned by it or any of its subsidiaries or over
which it has direct or indirect voting authority in favor of the approval
of the Phelps Dodge Merger and of the approval and adoption of the Phelps
Dodge Merger Agreement;
- that after Purchaser has purchased shares of Cyprus Amax Common Stock
through the Amended Offer, Phelps Dodge will be entitled to designate a
number of directors on the Cyprus Amax Board that will give Phelps Dodge
a percentage of representation on the Cyprus Amax Board equal to the
percentage of shares of Cyprus Amax Common Stock that it then owns; and
- that the obligation of Phelps Dodge to obtain approvals under antitrust
laws is unconditional and is not qualified by best efforts.
In addition, the Phelps Dodge Merger Agreement contains general covenants
requiring each party to take any further action necessary or desirable to carry
out the purposes of the Phelps Dodge Merger Agreement and to use reasonable
efforts to take all actions necessary, proper or advisable to consummate the
contemplated transactions. These general requirements are limited so that
neither party will be required to undertake divestitures which would have
material adverse effects on the companies.
NO SOLICITATION OF ALTERNATIVE TAKEOVER PROPOSALS
Cyprus Amax agreed that it will not, nor will it permit any of its
subsidiaries to, authorize or permit any of its respective directors, officers,
employees or any representative retained by Cyprus Amax or any of its
subsidiaries to, directly or indirectly through another person:
- solicit, initiate or encourage (whether by furnishing information or
otherwise), or take any other action designed to facilitate, any
inquiries or the making of any proposal which constitutes or reasonably
could be expected to lead to any Takeover Proposal (as defined below), or
- participate in any discussions or negotiations regarding any Takeover
Proposal.
A "Takeover Proposal" means, other than the transactions contemplated by
the Phelps Dodge Merger Agreement,
- any inquiry, proposal or offer, or any improvement, restatement,
amendment, renewal or reiteration of any such inquiry, proposal or offer,
from any person relating to any direct or indirect acquisition of a
business or equity securities of Cyprus Amax or any of its subsidiaries,
- any tender offer or exchange offer that if consummated would result in
any person beneficially owning any class of equity securities of Cyprus
Amax or any of its subsidiaries, or
- any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Cyprus Amax or
any of its subsidiaries.
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Except as provided in the next two paragraphs, neither the board of
directors of Cyprus Amax nor any committee of such board will do any of the
following:
- withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to the other party, the approval or recommendation by the
board of directors or any committee, of the Phelps Dodge Merger or the
Phelps Dodge Merger Agreement,
- approve or recommend, or propose publicly to approve or recommend, any
Takeover Proposal, or
- cause Cyprus Amax to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement related to
any Takeover Proposal.
However, if the board of directors of Cyprus Amax receives a Takeover
Proposal and the board of directors of Cyprus Amax determines in good faith,
after consultation with outside counsel and its financial advisor that such
Takeover Proposal is reasonably capable of being completed, taking into account
all legal, financial, regulatory and other aspects of the proposal and would, if
consummated, result in a transaction more favorable to Cyprus Amax shareholders
than the transaction contemplated by the Phelps Dodge Merger Agreement, the
board of directors of Cyprus Amax may (x) take any of the actions described
above or (y) terminate the Phelps Dodge Merger Agreement (and concurrently with
or after such termination, if it so chooses, cause Cyprus Amax to enter into any
Acquisition Agreement with respect to any Takeover Proposal) but only after the
fifth business day following Phelps Dodge's receipt of written notice advising
Phelps Dodge that the board of directors of Cyprus Amax is prepared to accept a
Takeover Proposal, specifying the material terms and conditions of such Takeover
Proposal and identifying the person making such Takeover Proposal.
Notwithstanding any subsequent determination by the Board of Directors of
Cyprus Amax to change such recommendation, the Phelps Dodge Merger Agreement
shall be submitted to the stockholders of Cyprus Amax at the Cyprus Amax
stockholder meeting for the purpose of obtaining the Cyprus Amax stockholder
approval and nothing contained in the Phelps Dodge Merger Agreement shall be
deemed to relieve Cyprus Amax of such obligation.
The Phelps Dodge Merger Agreement does not prohibit the parties
- from taking and disclosing to their respective stockholders a position
with respect to a tender offer required by law, or
- from making any disclosure to their respective stockholders if, in the
good faith judgment of the board of directors, after consultation with
outside counsel, failure to disclose would be inconsistent with its
obligations under applicable law.
Each of the parties has agreed to notify promptly the other party orally
and in writing of any request for information or of any Takeover Proposal, the
material terms and conditions of such request or proposal and the identity of
the person making such request or proposal, and will keep the other party
reasonably informed of the status and details of any such request or proposal.
STOCK OPTIONS AND OTHER STOCK-BASED AWARDS
Simultaneously with the Phelps Dodge Merger, each outstanding option to
purchase Cyprus Amax Common Stock and related stock appreciation right (SAR), if
any, will be converted into an option (together with an SAR, if applicable) to
acquire the number of shares of Phelps Dodge Common Stock equal to the number of
shares of Cyprus Amax Common Stock which could have been obtained upon the
exercise of the option immediately prior to the time the Phelps Dodge Merger
becomes effective multiplied by the Cyprus Amax stock consideration.
In the case of an option to purchase Cyprus Amax Common Stock, the exercise
price per share of Phelps Dodge Common Stock will be adjusted to equal the
exercise price for such option as in effect immediately prior to the time the
Phelps Dodge Merger becomes effective divided by the Cyprus Amax stock
consideration. Phelps Dodge will assume the obligations of Cyprus Amax with
respect to such options. Phelps Dodge will assume the obligations of Cyprus Amax
under their respective option plans and, except as
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described above, the terms of such options (and SARs) shall continue to apply in
accordance with the terms of the plans and agreements under which they were
issued, including any provisions for acceleration.
Simultaneously with the Phelps Dodge Merger, each outstanding award
(including restricted stock, performance units, shares units and performance
shares) under any employee incentive or benefit plan or arrangement and
non-employee director plan presently maintained by Cyprus Amax will be converted
into a similar instrument of Phelps Dodge, with appropriate adjustments to
preserve the inherent value of the awards with no detrimental effects on the
holders. The other terms of each award will continue to apply, including any
provisions which the restrictions will have lapsed on or prior to the time the
Phelps Dodge Merger becomes effective. Shares of such previously restricted
stock will be converted in accordance with the conversion provisions applicable
to other shares of common stock.
Following the completion of the business combination, Phelps Dodge will
reserve for issuance and delivery a sufficient number of shares of Phelps Dodge
Common Stock upon the exercise of any Cyprus Amax stock options.
BENEFITS MATTERS
It is the intention of the parties that for a period of one year following
the completion of the business combination, Phelps Dodge will maintain the
employee benefit plans of Cyprus Amax generally in accordance with their terms
in effect at the completion of the business combination, with only amendments
that are required by applicable law or permitted by the terms of that agreement,
and which do not adversely affect the rights of participants under such
agreement. In addition, following the completion of the business combination,
Phelps Dodge will guarantee the performance of certain existing employment
agreements and benefit plans of Cyprus Amax.
Phelps Dodge has also agreed that it will
- waive any limitations regarding pre-existing conditions and eligibility
waiting periods under any welfare or employee benefit plan maintained by
Cyprus Amax following the completion of the business combination;
- provide employees of Cyprus Amax with credit for any co-payments and
deductibles paid in the calendar year prior to the completion of the
business combination; and
- generally, treat all service by employees of Cyprus Amax prior to the
completion of the business combination as service with Phelps Dodge under
all compensation and benefit plans and policies of Cyprus Amax.
INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE
Phelps Dodge has agreed that all exculpation and indemnification provisions
now existing in favor of the current or former directors or officers of Cyprus
Amax as provided in its charter or bylaws or in any agreement will survive the
business combination. Phelps Dodge has agreed that, for six years from the time
the business combination becomes effective, it will indemnify such indemnified
parties to the same extent as they were entitled while working on behalf of
Cyprus Amax.
Phelps Dodge has also agreed that, for three years from the time the
business combination becomes effective, it will maintain in effect Cyprus Amax's
current directors' and officers' liability insurance policies for those persons
who are currently covered by the policies. However, Phelps Dodge will not be
required to expend in any one year more than 150% of the annual premiums
currently paid by Cyprus Amax. If the annual premiums of such insurance coverage
exceed the 150% limit, Phelps Dodge only will be obligated to obtain a policy
with the greatest coverage available for a cost not exceeding the limit. Phelps
Dodge is entitled to meet its obligations under this paragraph by covering the
relevant persons under its own insurance policies.
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LITIGATION
Prior to the effective time of the merger, each of the parties will
terminate all litigation commenced against the other in connection with the
business combination and the Phelps Dodge exchange offer for Cyprus Amax shares.
Each party will also use its reasonable best efforts to have lawsuits commenced
by third parties in connection with those transactions to be dismissed with
prejudice.
CONDITIONS PRECEDENT TO THE PHELPS DODGE MERGER
The Phelps Dodge Merger Agreement contains certain conditions to both
parties' obligations to complete the Phelps Dodge Merger. Neither party will be
obligated to complete the business combination unless at or prior to the time
the business combination becomes effective:
- Stockholder Approval. The approval of the stockholders of Phelps Dodge
and Cyprus Amax have been obtained in accordance with applicable law.
- Legality. No statute, rule, regulation, executive order, decree, ruling
or injunction by any tribunal or governmental authority prohibits the
consummation of the Phelps Dodge Merger substantially on the terms
contemplated by the Phelps Dodge Merger Agreement.
- The Purchaser shall have accepted for exchange all shares of Cyprus Amax
Common Stock validly tendered and not withdrawn pursuant to the Amended
Offer; provided, however, that this condition shall not be applicable to
the obligations of the Purchaser if, in breach of the Phelps Dodge Merger
Agreement, the Purchaser fails to accept for exchange and exchange any
such shares validly tendered and not withdrawn pursuant to such offer.
TERMINATION
The Phelps Dodge Merger Agreement may be terminated at any time prior to
the time the Phelps Dodge Merger becomes effective, in any of the following
circumstances:
- by our mutual written consent;
- by either of the parties if, without fault of either terminating party,
the purchase of Cyprus Amax Common Stock pursuant to the Amended Offer
has not occurred on or before March 31, 2000, which date can be extended
by mutual written consent;
- by either of the parties if the Amended Offer expires or is terminated or
withdrawn without any Cyprus Amax Common Stock being purchased;
- by either of the parties if a court or governmental body has issued an
order (other than a temporary restraining order) enjoining or prohibiting
the purchase of Cyprus Amax Common Stock pursuant to the Amended Offer or
the Phelps Dodge Merger, if such order has become final and
nonappealable, so long as the party seeking to terminate has used its
reasonable best efforts to remove or lift such order; or a statute, rule,
regulation, order, injunction or decree has been enacted, entered or
promulgated which prohibits or makes illegal the consummation of the
Phelps Dodge Merger substantially on the terms contemplated by the Phelps
Dodge Merger Agreement, and which order, injunction, or decree has become
final and nonappealable; or there shall have been a failure to obtain any
required consent or approval under foreign laws or regulations which
would prohibit consummation of the Amended Offer or the Phelps Dodge
Merger or would have a material adverse effect on Phelps Dodge or Cyprus
Amax;
- by the Phelps Dodge board of directors, at any time prior to the purchase
of any shares of Cyprus Amax Common Stock pursuant to the Amended Offer,
if (i) the Board of Cyprus Amax or any committee thereof shall have
withdrawn or modified in a manner which is adverse to Phelps Dodge its
approval or recommendation of the Amended Offer or the Phelps Dodge
Merger Agreement, (ii) the Cyprus Amax board shall have recommended
another Takeover Proposal, (iii) there is a public disclosure of another
Takeover Proposal and the Minimum Tender Condition is not satisfied, or
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(iv) the representations and warranties of Cyprus Amax are not correct as
of the date of the Prospectus dated October 1, 1999 and as of the
expiration date as though made on and as of the date of the Prospectus
and the expiration date of the Amended Offer except where the failure of
such representations and warranties to be so true and correct would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Cyprus Amax; and Cyprus Amax shall have
performed or complied in all material respects with all the material
agreements and covenants required by the Phelps Dodge Merger Agreement
and such condition is not satisfied within 30 days of notice;
- by Cyprus Amax, at any time prior to the acceptance for payment shares of
Cyprus Amax Common Stock under the Amended Offer if there is a material
breach of any of Phelps Dodge's representations, warranties or covenants
contained in the Phelps Dodge Merger Agreement which is not cured within
10 days of notice; and
- by Cyprus Amax in accordance with the provisions described under the
caption "-- No Solicitation of Alternative Takeover Proposals"; provided
that Cyprus Amax shall have complied with all provisions of such section
and shall have paid the termination fee described below to Phelps Dodge.
CLOSING
The closing of the Phelps Dodge Merger will take place within two business
days after the later of the Phelps Dodge stockholder meeting and the Cyprus Amax
stockholder meeting.
TERMINATION FEES
Cyprus Amax is liable to Phelps Dodge for a termination fee of $45 million
if the Phelps Dodge Merger Agreement is terminated under certain circumstances.
In general, the termination fee is payable by Cyprus Amax if:
- prior to the date of the Cyprus Amax stockholder meeting a Takeover
Proposal is made known to Cyprus Amax or is made directly to its
stockholders generally or any person has publicly announced an intention
(whether or not conditional) to make a Takeover Proposal and thereafter
the Phelps Dodge Merger Agreement is terminated by either party pursuant
to certain specified provisions of the Phelps Dodge Merger Agreement.
However, no termination fee is payable unless within eighteen months of the
termination, Cyprus Amax or any of its subsidiaries enters into an agreement for
or consummates a transaction whereby a third party acquires twenty percent of
any class of stock of Cyprus Amax and its subsidiaries, or a business that
constitutes twenty percent or more of the revenues, net income or assets of the
Cyprus Amax, or otherwise consummates a Takeover Proposal.
The Phelps Dodge Merger Agreement also provides that if Cyprus Amax fails
to pay any termination fee which is judged to be due, Cyprus must pay the costs
and expenses of any action taken to collect payment, together with interest on
the termination fee.
In addition, in the event the Phelps Dodge Merger Agreement is terminated
under certain circumstances, Phelps Dodge will reimburse Cyprus Amax for the
termination fee that has been paid to ASARCO Incorporated pursuant to an
agreement and plan of merger between Cyprus Amax, Asarco Incorporated and other
parties, dated as of July 15, 1999, or under the amendment to such merger
agreement, dated September 27, 1999. There will be no reimbursement if the
termination is a result of a breach by Cyprus Amax or if the termination is in
connection with a Takeover Proposal for Cyprus Amax other than by Phelps Dodge.
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COSTS AND EXPENSES
Each of the parties will pay their own costs and expenses in connection
with the Phelps Dodge Merger Agreement and the contemplated transactions whether
or not the Phelps Dodge Merger is completed, except that the parties will
equally share
- the filing fee in connection with any HSR Act filing or any other
required statutory approval;
- the commissions and other out-of-pocket transaction costs, including the
expenses and compensation of the exchange agent, incurred in connection
with the sale of shares of Phelps Dodge Common Stock to generate cash to
pay in lieu of fractional shares; and
- all transfer taxes.
AMENDMENT
At any time prior to the time the Phelps Dodge Merger becomes effective, we
may amend or supplement any of the terms of the Phelps Dodge Merger Agreement in
writing by both of us, provided that, following the purchase of Cyprus Amax
Common Stock pursuant to the Amended Offer, the Phelps Dodge Merger Agreement
shall not be supplemented or amended unless such supplement or amendment is
approved by a vote of the majority of "continuing directors" of Cyprus Amax, and
provided further that following approval by our respective stockholders we may
not amend or change any provision relating to the Merger Consideration or make
any other change not permitted under applicable law without further approval by
the Cyprus Amax stockholders.
WAIVER
At any time prior to the effective time, the Phelps Dodge Merger Agreement
permits either party in writing to:
- extend the time for the performance of any of the obligations or other
acts of the other party;
- waive any inaccuracies in the representations and warranties of the other
party; and
- waive compliance with any of the agreements or conditions of the other
party contained in the Phelps Dodge Merger Agreement.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
On September 27, 1999, Cyprus Amax entered into Amendment No. 1 to the
Merger Agreement with ASARCO ("Amendment No. 1 to the ASARCO Merger Agreement"),
which permitted Cyprus Amax and ASARCO to independently explore alternatives to
the ASARCO Merger Agreement. Amendment No. 1 to the ASARCO Merger Agreement was
filed as Exhibit 23 to Amendment No. 6 to Cyprus Amax's Schedule 14D-9. On
September 28, 1999, Milton H. Ward, Chairman, President and Chief Executive
Officer of Cyprus Amax, contacted Douglas C. Yearley, Chairman and Chief
Executive Officer of Phelps Dodge, to discuss the possibility of a two-way
business combination between Cyprus Amax and Phelps Dodge. (Messrs. Ward and
Yearley had previously met on September 24, 1999, along with Francis R.
McAllister, Chief Executive Officer of ASARCO, to discuss the possibility of a
three-way business combination among Cyprus Amax, ASARCO and Phelps Dodge.) From
September 28, 1999 to the morning of September 30, 1999, representatives of
Cyprus Amax and Phelps Dodge and their respective financial and legal advisors
negotiated the terms, including the proposed exchange ratio and cash portion, of
the proposed merger agreement. Also during this period, representatives of
Cyprus Amax and its financial advisor had contacts with other potential partners
for a business combination.
On September 30, 1999, the Cyprus Amax Board of Directors held a special
meeting to consider the proposed two-way business combination with Phelps Dodge.
At the meeting, (1) Mr. Ward and other officers of Cyprus Amax reviewed the
status of the transaction and discussed with the directors the reasons for the
transaction, (2) representatives of Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") made a financial presentation concerning the
transaction and (3) Cyprus Amax's legal advisors outlined the
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terms of the proposed transaction. Merrill Lynch rendered its opinion that, as
of such date, and based upon and subject to the matters set forth in their
opinion, the consideration to be received by Cyprus Amax stockholders in the
Amended Offer and the Phelps Dodge Merger is fair from a financial point of view
to such holders. At the special meeting, the Cyprus Amax Board of Directors
approved and adopted the Phelps Dodge Merger Agreement and the related
transactions by the unanimous vote of the directors present.
In reaching its conclusion described above, the Cyprus Amax Board of
Directors considered the following factors, among others:
1. At a meeting held on September 8, 1999, the Cyprus Amax Board had
unanimously determined that the Phelps Dodge Offer was inadequate and
not in the best interests of Cyprus Amax and its stockholders. The basis
for the Board's rejection of the Phelps Dodge Offer was set forth in the
Schedule 14D-9. The price of $7.61 in cash and 0.2203 shares of Phelps
Dodge Common Stock per share of Cyprus Amax Common Stock provided by the
Amended Offer and the Phelps Dodge Merger Agreement represents a
substantial increase over the price of 0.3135 shares of Phelps Dodge
Common Stock per share of Cyprus Amax Common Stock provided by the
Phelps Dodge Offer that the Board rejected on September 8, 1999.
2. The Board reviewed the possible alternatives to the Phelps Dodge Merger,
including the potential merger with ASARCO, the value to stockholders of
such alternatives and the timing and likelihood of achieving additional
value from these alternatives, and the possibility that equally suitable
partners for merger and consolidation would be available. In this
connection, the Board considered the fact that, since the execution of
Amendment No. 1 to the ASARCO Merger Agreement, representatives of
Cyprus Amax had contacted certain third parties who, it was believed,
might have a potential interest in a transaction with Cyprus Amax, and
the Board considered the responses to such inquiries. The Board of
Directors concluded that the Phelps Dodge Merger was superior to any
alternatives and that, if a superior alternative did become available,
Cyprus Amax would be able to pursue such an alternative under the terms
of the Phelps Dodge Merger Agreement. The Board of Directors considered
the course of discussions and negotiations with ASARCO up to the date of
the September 30 meeting of the Board, along with other facts and
circumstances such as the offer made on September 27, 1999 by Grupo
Mexico for ASARCO.
3. The Board considered the pending offer by Phelps Dodge for ASARCO and
the effect that such a combination would have on a combined Phelps
Dodge/Cyprus Amax.
4. The Board considered the fact that the Amended Offer and Phelps Dodge
Merger provided stockholders of Cyprus Amax the opportunity to receive a
premium for their shares, and, in addition, the stockholders of Cyprus
Amax could elect to continue to hold shares representing an equity
interest in the combined company, and that there exists no controlling
stockholder of Phelps Dodge now or immediately after the Phelps Dodge
Merger. In this connection, the Board of Directors considered that
Cyprus Amax stockholders would own approximately 25.6% of the shares of
the combined Phelps Dodge/Cyprus Amax.
5. The Board reviewed the opinion of Merrill Lynch, Cyprus Amax's financial
advisor, that, as of the date of such opinion, and based upon and
subject to the factors and assumptions set forth in the opinion, the
consideration to be received by Cyprus Amax stockholders in the Amended
Offer and the Phelps Dodge Merger is fair from a financial point of view
to such holders.
6. The Board considered that Phelps Dodge had already received United
States antitrust approval for the acquisition.
7. The Board considered that the transaction with Phelps Dodge was expected
to be immediately and substantially accretive to cash flow and earnings
per share for Cyprus Amax shareholders who receive Phelps Dodge shares
in exchange for their Cyprus Amax Common Stock, and that the
consideration to be received by Cyprus Amax stockholders indicated that
the synergies being contributed to the combined company by Cyprus Amax
were being recognized in the exchange ratio and cash portion of the
Amended Offer and the merger consideration.
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8. The Board considered the business combination with Phelps Dodge as an
opportunity to improve stockholder value as a result of becoming a
world-class, lower-cost global copper producer with significant
opportunities to integrate operations in the southwestern United States,
administrative functions, and exploration and development activities.
Cyprus Amax's Board of Directors also considered certain countervailing
factors in its deliberations concerning the Phelps Dodge Merger, including:
1. The Board considered that Cyprus Amax was required to pay a termination
fee of $45 million to ASARCO under Amendment No. 1 to the ASARCO Merger
Agreement (the "ASARCO Termination Fee") in order to be free to enter
into the Phelps Dodge Merger Agreement.
2. The Board reviewed the terms and conditions of the Phelps Dodge Merger
Agreement, including the following:
- The Board considered the provision under the Phelps Dodge Merger
Agreement that provided that Phelps Dodge would reimburse Cyprus Amax
for the ASARCO Termination Fee if the Phelps Dodge Merger Agreement is
terminated under circumstances specified in the Phelps Dodge Merger
Agreement, but that the ASARCO Termination Fee would not be reimbursed
to Cyprus Amax under all circumstances of termination of the Phelps
Dodge Merger Agreement.
- The Board considered the requirement under the Phelps Dodge Merger
Agreement that Cyprus Amax pay to Phelps Dodge a termination fee of
$45 million if the Phelps Dodge Merger Agreement is terminated under
circumstances specified in the Phelps Dodge Merger Agreement.
While the Board thought that these provisions could result in
significant fees to be borne by Cyprus Amax, it accepted these
provisions as a means to obtain other terms favorable to Cyprus Amax, in
particular the right to negotiate or exchange information with potential
bidders and the right to terminate the Phelps Dodge Merger Agreement, in
each case, in the event of an alternative transaction that the Board
determined was superior to the transaction with Phelps Dodge.
Following the approval of the Cyprus Amax Board of Directors, on September
30, 1999, Cyprus Amax terminated the ASARCO Merger Agreement and immediately
thereafter Cyprus Amax and Phelps Dodge executed the Phelps Dodge Merger
Agreement and issued a joint press release.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Pursuant to the terms of a letter agreement dated September 30, 1999,
relating to the financial advisory services provided by Merrill Lynch, Cyprus
Amax has agreed to pay Merrill Lynch as follows: (1) a cash fee of $750,000,
which was payable upon the date of the letter agreement with Merrill Lynch and
(2) a cash fee of $10.5 million upon consummation of the Phelps Dodge Offer;
provided that any fee previously paid to Merrill Lynch pursuant to clause (1)
will be deducted from any fee to which Merrill Lynch is entitled pursuant to
clause (2). Cyprus Amax has also agreed to reimburse Merrill Lynch for its
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of legal counsel, and to indemnify Merrill Lynch and certain
related parties from and against certain liabilities, including liabilities
under the federal securities laws, arising out of its engagement.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(b) To the best of Cyprus Amax's knowledge, all of Cyprus Amax's executive
officers, directors and affiliates currently intend to tender all shares of
Cyprus Amax Common Stock that are owned beneficially or held of record by such
persons.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
The special meeting of Cyprus Amax's stockholders that had been scheduled
for September 30, 1999 and then postponed until October 7, 1999 has been
canceled.
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Cyprus Amax and Phelps Dodge have agreed to take certain action with
respect to the currently pending litigation between them. See Item 3 above.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Item 9 of the Schedule 14D-9 is hereby amended and restated as follows:
Exhibit 1: Pages 62, 64-66, 72-73 and 79 in the Joint Proxy
Statement/Prospectus and page 13 in the Asarco Cyprus 8-K.**
Exhibit 2: Pages 11-22 in the Annual Proxy Statement.**
Exhibit 3: Press release issued by Cyprus Amax and ASARCO, dated
September 9, 1999.**
Exhibit 4: Letter to Stockholders of Cyprus Amax, dated September 9,
1999.* **
Exhibit 5: Complaint filed in Phelps Dodge v. ASARCO et al., Superior
Court of New Jersey Chancery Division: Mercer County, August
27, 1999.**
Exhibit 6: Complaint filed in Sterns v. McAllister et al., Superior
Court of New Jersey Chancery Division: Mercer County, August
24, 1999.**
Exhibit 7: Complaint filed in Greenfield v. Osborne, et al., Superior
Court of New Jersey Chancery Division: Mercer County, August
25, 1999.**
Exhibit 8: Complaint filed in Steiner v. Cyprus Amax et al., Court of
Chancery of the State of Delaware in and for New Castle
County, August 23, 1999.**
Exhibit 9: Complaint filed in Miller v. Cyprus Amax et al., Court of
Chancery of the State of Delaware in and for New Castle
County, August 23, 1999.**
Exhibit 10: Complaint filed in Bruno v. Stookey et al., Court of
Chancery of the State of Delaware in and for New Castle
County, August 24, 1999.**
Exhibit 11: Complaint filed in Green v. Stookey et al., Court of
Chancery of the State of Delaware in and for New Castle
County, August 24, 1999.**
Exhibit 12: Complaint filed in Lifshitz v. Stookey et al., Court of
Chancery of the State of Delaware in and for New Castle
County, August 24, 1999.**
Exhibit 13: Complaint filed in Klotz v. Ward et al., Court of Chancery
of the State of Delaware in and for New Castle County,
August 24, 1999.**
Exhibit 14: Complaint filed in Grill v. Stookey, et al., Court of
Chancery of the State of Delaware in and for New Castle
County, August 26, 1999.**
Exhibit 15: Complaint filed in Phelps Dodge v. Cyprus Amax, et al.,
Court of Chancery for the State of Delaware in and for New
Castle County, August 27, 1999.**
Exhibit 16: Letter from Cyprus Amax and ASARCO to shareholders, dated
September 10, 1999.**
Exhibit Newspaper Advertisement by Cyprus Amax and ASARCO, dated
17:...... September 10, 1999.**
Exhibit 18: Investor Presentation by Cyprus Amax and ASARCO.**
Exhibit 19: Newspaper Advertisement by Cyprus Amax and ASARCO, dated
September 17, 1999.**
Exhibit 20: Letter from Cyprus Amax and ASARCO to shareholders, dated
December 20, 1999.**
Exhibit 21: Investor Presentation by Cyprus Amax and ASARCO.**
Exhibit 22: Press release issued by Cyprus Amax, dated September 27,
1999.**
Exhibit 23: Amendment No. 1, dated as of September 27, 1999, to
Agreement and Plan of Merger, dated July 15, 1999, among
Asarco Cyprus Incorporated, ACO Acquisition Corp., CAM
Acquisition Corp., ASARCO and Cyprus Amax.**
Exhibit 24: Press release issued by Cyprus Amax, dated September 28,
1999.**
Exhibit 25: Letter to Stockholders of Cyprus Amax, dated October 1,
1999.+
Exhibit 26: Press release issued by Cyprus Amax and Phelps Dodge, dated
September 30, 1999.
Exhibit 27: Agreement and Plan of Merger, dated as of September 30,
1999, among Phelps Dodge, CAV Corporation and Cyprus Amax.
Exhibit 28: Opinion of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, dated September 30, 1999.+
- ---------------
* Included with Schedule 14D-9 mailed to stockholders.
+ Included with Amendment No. 7 to the 14D-9 mailed to stockholders.
** Previously Filed.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
CYPRUS AMAX MINERALS COMPANY
By: /s/ PHILIP C. WOLF
------------------------------------
Philip C. Wolf
Senior Vice President,
General Counsel and Secretary
Dated: October 1, 1999
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