Exhibit 10.4

 
FREEPORT-McMoRan COPPER & GOLD INC.

AMENDMENT NO. 1
TO
NOTICE OF GRANT OF
NONQUALIFIED STOCK OPTIONS AND
STOCK APPRECIATION RIGHTS
UNDER THE
2004 DIRECTOR COMPENSATION PLAN

THIS AMENDMENT NO. 1, dated and effective May ____, 2006, to the Notice of Grant
of Nonqualified Stock Options and Stock Appreciation Rights (the “Notice”), is
by and between Freeport-McMoRan Copper & Gold Inc. (the “Company”) and
______________ (the “Director”).
 
WHEREAS, under the terms of the Freeport-McMoRan Copper & Gold Inc. 2004
Director Compensation Plan (the “Plan”) and pursuant to the Notice, the
Director, a former advisory director of the Company, was granted effective May
9, 2004 and with the approval of the Company’s stockholders, options to purchase
shares of Class B common stock and stock appreciation rights with respect to
shares of Class B common stock (the “Replacement Grants”) to replace previous
awards of options and stock appreciation rights that terminated in accordance
with their terms as a result of the Director’s resignation from the board of
directors on February 9, 2004;
 
WHEREAS, the applicable exercise and base prices of the Replacement Grants were
equal to the corresponding exercise and base prices of the expired awards, thus
were not equal to the fair market value of the Class B common stock on May 9,
2004;
 
WHEREAS, new Section 409A of the Internal Revenue Code (“Section 409A”), imposes
additional tax and penalties on stock options and stock appreciation rights
granted with an exercise or base price that is less than fair market value on
the date of grant; and
 
WHEREAS, as permitted by the guidance and proposed regulations related to
Section 409A, the Company and the Director desire to (i) amend the terms of the
portions of the Replacement Grants, which are more fully described on Appendix A
hereof, that were not fully vested prior to December 31, 2004 and that were not
subsequently cancelled through exercise prior to December 31, 2005, to increase
the exercise or base price of the particular awards to $29.10, which is the fair
market value of the Common Stock on May 9, 2004 (the date of grant), and (ii) to
provide for cash payments subject to a vesting schedule to compensate the
Director for the loss resulting from the increase in the exercise and base price
of the awards.
 
NOW, THEREFORE, in consideration of the premises, the Company and the Director
agree as follows:
 
1.  The exercise price of certain stock options and the base price of certain
stock appreciation rights granted pursuant to the Notice, as set forth on
Appendix A, shall be $29.10.
 
2.  The Director shall be entitled to a cash payment upon vesting equal to the
difference in the original exercise or base price of the award and $29.10, which
cash payments shall be made on the dates indicated on Appendix A.
 
3.  Except to the extent amended herein, all other provisions in the Notice
shall remain unchanged.
 
FREEPORT-McMoRan COPPER & GOLD INC.

By: 

_____________________________________
[Director]

[to come]