ex10-38.htm


    
      
        

      

    

    Exhibit 10.38

     

    
 

    FREEPORT-MCMORAN
COPPER & GOLD INC.

    SUPPLEMENTAL
EXECUTIVE CAPITAL ACCUMULATION PLAN

    AMENDMENT
TWO

    


     

    WHEREAS, Freeport-McMoRan
Copper & Gold Inc. (the “Company”) adopted the Freeport-McMoRan Copper &
Gold Inc. Supplemental Executive Capital Accumulation Plan (the “Plan”)
effective January 1, 1996 for the benefit of its eligible
employees;

     

    WHEREAS, Section 10.02 of the
Plan provides that the Company reserves the right by written action of its Board
of Directors, or individual(s) specifically designated by the Board to act on
its behalf, to change or discontinue the Plan at any time and such authority was
granted to Dean T. Falgoust on May 1, 2008;

     

    WHEREAS, in response to the
enactment of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), effective as of January 1, 2005, the Company in operation separated all
Plan contributions made and benefits earned and vested as of December 31, 2004,
along with all earnings attributable thereto (“Grandfathered Benefits”) from
all Plan contributions earned or vested after December 31, 2004 with all
earnings attributable thereto (“409A Benefits”);

     

    WHEREAS, at all times on and
after January 1, 2005, the Grandfathered Benefits, along with earnings
attributable thereto, have been (and continue to be) subject to the terms and
provisions of the Plan as in effect on October 3, 2004, and no material
modifications, within the meaning of Code Section 409A and the Treasury
Regulations and guidance thereunder, have been made (in form or operation) to
the Plan with respect to such benefits;

     

    WHEREAS, the 409A Benefits
under the Plan have been administered in the “reasonable, good faith” compliance
standard prescribed by Code Section 409A, which is applicable until the
effective date of the final regulations issued under Code Section
409A;

     

    WHEREAS, the Company desires
to bifurcate the Plan such that (1) the Grandfathered Benefits, along with all
earnings attributable thereto, shall be maintained under and paid from the Plan,
which shall be frozen and intended to be a “grandfathered” plan exempt
from Code Section 409A and (2) the 409A Benefits, along with all earnings
attributable thereto, shall be spun-off from the Plan into, and maintained under
and paid from, a newly established and separate plan that is intended to comply
with the requirements of Code Section 409A, known as the Freeport-McMoRan Copper
& Gold Inc. 2005 Supplemental Executive Capital Accumulation Plan
(“FCX-SECAP”), effective as of January 1, 2008;

     

    WHEREAS, in connection with
the bifurcation of the Plan, the Company desires to change the name of the Plan
to the Freeport-McMoRan Copper & Gold Inc. 1996 Supplemental Executive
Capital Accumulation Plan;

     

    WHEREAS, the Company desires
to recognize merger of the FM Services Company 1996 Supplemental Executive
Capital Accumulation Plan into the Freeport-McMoRan Copper & Gold Inc. 1996
Supplemental Executive Capital Accumulation Plan effective January 1,
2008,

     

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    with the
Freeport-McMoRan Copper & Gold Inc. 1996 Supplemental Executive Capital
Accumulation Plan surviving the merger; and

     

    WHEREAS, the Company further
desires to amend the Plan to change the hypothetical earnings rate on all
Accounts, describe the delegation of authority to a Committee that will function
as the Plan Administrator of the Plan, and add claims procedures;

     

    NOW, THEREFORE, the Company,
having reserved the right under Section 10.02 of the Plan, does hereby amend the
Plan, effective January 1, 2008, as follows:

     

    I.

     

    The Plan
is hereby frozen.  No new participants shall be permitted, no deferred
contributions shall be made and no benefits shall be earned or vested under the
Plan after December 31, 2004 (other than earnings on the contributions and
benefits earned and vested prior to January 1, 2005).  The Plan shall
only provide contributions made and benefits earned and vested as of December
31, 2004, along with all earnings attributable thereto (“Grandfathered
Benefits”).  Any contributions or benefits (and earnings
thereon) not vested as of December 31, 2004, and all contributions deferred or
vested after December 31, 2004 (“409A Benefits”), are hereby
spun-off into the new Freeport-McMoRan Copper & Gold Inc. 2005 Supplemental
Executive Capital Accumulation Plan (“FCX-SECAP”) as of January 1, 2008 (and
shall be paid from such new plan).

    


    II.

     

    The name
of the Plan is hereby amended to be the Freeport-McMoRan Copper & Gold Inc.
1996 Supplemental Executive Capital Accumulation Plan, and all references to the
Freeport-McMoRan Copper & Gold Inc. Supplemental Executive Capital
Accumulation Plan are hereby amended accordingly, and the definition of “Plan”
in Section 1.16 of Article I of the Plan is hereby amended to read as
follows:

    


    1.16           Plan
means this Freeport-McMoRan Copper & Gold Inc. 1996 Supplemental Executive
Capital Accumulation Plan (“Plan” or “FCX-SECAP”) as set forth herein (formerly
the Freeport-McMoRan Copper & Gold Inc. Supplemental Executive Capital
Accumulation Plan (“FCX-SECAP”)).  As of January 1, 2008, the Plan is
frozen and no new participants shall be permitted and no contributions shall be
made or vested (other than earnings on the contributions that were earned and
vested as of December 31, 2004) under the Plan after December 31,
2007.  All unvested contributions as of December 31, 2004 (along with
earnings attributable thereto) were spun-off from the Plan, effective as of
January 1, 2008, into, and shall be provided under the Freeport-McMoRan Copper
& Gold Inc. 2005 Supplemental Executive Capital Accumulation Plan
(“FCX-SECAP”).


    
      
         


      

      
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    III.

     

    Effective
January 1, 2008, the FM Services Company 1996 Supplemental Executive Capital
Accumulation Plan is merged into the Freeport-McMoRan Copper & Gold Inc.
1996 Supplemental Executive Capital Accumulation Plan, which shall survive the
merger, and 100% of the memo accounts in the FM Services Company 1996
Supplemental Executive Capital Accumulation Plan are transferred to the
Freeport-McMoRan Copper & Gold Inc. 1996 Supplemental Executive Capital
Accumulation Plan.  In addition, any special distribution provisions
will be available for the Participants and assets previously identified FM
Services Company 1996 Supplemental Executive Capital Accumulation
Plan.  Except as stated herein, the separate existence of the FM
Services Company 1996 Supplemental Executive Capital Accumulation Plan shall
cease.  Notwithstanding, the following provisions of the FM Services
Company 1996 Supplemental Executive Capital Accumulation Plan provide historical
information: Sections 5.02, Predecessor Employer Credit – Stratus Properties,
Inc. and Section 4.01(d) the DC Adjustment Contributions Credits.

    


    IV.

     

    Section
3.02, FCX-SECAP
Basic Credit Account, is hereby amended and restated, to read as
follows:

     

    3.02           FCX-SECAP
Basic Credit Account.  Effective January 1, 2009, the
Participant's FCX-SECAP Basic Credits shall be treated as if invested by the
Committee in a manner to produce a rate of interest equal to the prime rate, as
published in the Federal Reserve Statistical Report at the beginning of each
month.  Prior to January 1, 2009, the Participant's FCX-SECAP Basic
Credits shall be treated as if invested by the Committee in a manner to produce
a rate of interest similar to that earned quarterly by the Vanguard Retirement
Savings Trust which is an investment contract fund of the FCX-ECAP.

    


    V.

     

    Section
4.00, FCX-SECAP
Company Savings Credit Account, is hereby amended and restated, to read
as follows:

     

    
      	
               
      

            	
              (b)

            	
              Effective
      January 1, 2009, the Participant's FCX-SECAP Basic Credits shall be
      treated as if invested by the Committee in a manner to produce a rate of
      interest equal to the prime rate, as published in the Federal Reserve
      Statistical Report at the beginning of each month.  Prior to
      January 1, 2009, the Participant's FCX-SECAP Basic Credits shall be
      treated as if invested by the Committee in a manner to produce a rate of
      interest similar to that earned quarterly by the Vanguard Retirement
      Savings Trust which is an investment contract fund of the
      FCX-ECAP.

            


    

     


    
      
         


      

      
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    VI.

     

    Paragraph
(h) of Section 4.01 FCX-SECAP
Enhanced Company Contribution Credits and FCX-SECAP DC Adjustment Contribution
Credits, is hereby amended and restated, to read  as
follows:

     

    
      	
               
      

            	
              (h)

            	
              Effective
      January 1, 2009, the Participant's FCX-SECAP Enhanced Company
      Contributions Credits and FCX-SECAP DC Adjustment Contribution Credits
      shall be treated as if invested by the Committee in a manner to produce a
      rate of interest equal to the prime rate, as published in the Federal
      Reserve Statistical Report at the beginning of each
      month.  Prior to January 1, 2009, credits made under this
      Section 4.01 shall be treated as if invested by the Committee in a manner
      to provide a rate of interest equal to the rate for ten year Treasury
      Notes, plus a percentage to be determined annually by the Committee (3.5%
      in 2000). The hypothetical earnings rate was ten percent (10%)
      annually.

            


    

     

    VII.

     

    The
following is added as a new paragraph (c) of Section 4.02, Transfer
Credits, to read as follows:

    


    
      	
               
      

            	
              (c)

            	
              All
      assets accounted for in Transfer Credits Accounts were distributed to the
      Participant of record on or before December 31,
  2004.

            


    

     

    VIII.

     

    Section
9.00, Committee,
is amended and restated, effective December 2, 2008, to read as
follows:

    


    9.00  Committee.  Effective
December 2, 2008, the Board appointed members to the Retirement Plan
Administration and Investment Committee (the "Committee").  The
Committee shall have the authority to (a) to perform any duties and
responsibilities with respect to the Plan as described in the governing
documents for the Plan and the related trust, if any; (b) take such actions with
respect to the Plan or related trust that, in the judgment of Committee with
respect to the Plan, is necessary or desirable with respect to the operation and
administration of the Plan, provided that the action or actions do not result in
a substantial increase in the estimated annual cost to the corporation and its
subsidiaries; (c) to select advisors, legal counsel, accountants, investment
managers and other agents to assist in the administration of the Plan or related
trust; (d)  hear and resolve all claims for benefits under the Plan
and decide all questions and disputes arising under the Plan in accordance with
the Claims Procedures described in Article IX; and (e) delegate any of its
responsibilities and duties to one or more subcommittees, which shall be
constituted of members appointed by the Committee but any such subcommittee may
include members who are not members of the Committee.  Subject to the
limitations set forth in the


    
      
         


      

      
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    Plan, the
Committee may from time to time establish and amend uniform and
nondiscriminatory rules and regulations for the operation and administration of
the Plan.

    


    The
operation, administration and determination and answering of all questions
arising under or in connection with the Plan shall be the responsibility of the
Committee.  The Committee shall have the exclusive right to interpret
the Plan and to determine any questions arising under or in connection with the
administration of the Plan.  The Committee’s decision or action in
respect thereof shall be final and conclusive and binding upon all persons
having an interest in the Plan.

     

    IX.

     

    A new
Section 9.05, Claims
Procedures, is added to the Plan, effective January 1, 2008, to read as
follows:

    


    9.05           Claims
Procedures.

    


    
      	
              (a)  

            	
              Any
      Participant or Beneficiary (a “Claimant”) who believes that he or she is
      entitled to a benefit under the Plan which he or she has not received may
      submit a claim to the Committee. Claims for benefits under this Plan shall
      be made in writing, signed by the Claimant or his or her authorized
      representative, and must specify the basis of the Claimant’s complaint and
      the facts upon which he or she relies in making such claim. A claim shall
      be deemed filed when received by the
Committee.

            


    

     

    
      	
              (b)  

            	
              In
      the event a claim for benefits is wholly or partially denied by the
      Committee, the Committee shall notify the Claimant in writing of the
      denial of the claim within a reasonable period of time, but not later than
      ninety (90) days after receipt of the claim, unless special circumstances
      require an extension of time for processing, in which case the ninety (90)
      day period may be extended to 180 days. The Committee shall notify the
      Claimant in writing of any such extension. A notice of denial shall be
      written in a manner reasonably calculated to be understood by the
      Claimant, and shall contain (i) the specific reason or reasons for denial
      of the claim; (ii) a specific reference to the pertinent Plan provisions
      upon which the denial is based; (iii) a description of any additional
      material or information necessary for the Claimant to perfect the claim,
      together with an explanation of why such material or information is
      necessary; and (iv) an explanation of the Plan’s review
      procedure.

            


    

     

    
      	
              (c)  

            	
              Within
      sixty (60) days of the receipt by the Claimant of the written notice of
      denial of the claim, the Claimant may appeal by filing with the Committee
      a written request for a full and fair review of the denial of the
      Claimant’s claim for benefits. Appeal requests under this Plan shall be
      made in writing, signed by the Claimant or his or her
      authorized

            


    

     


    
      
         


      

      
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    representative,
and must specify the basis of the Claimant’s complaint and the facts upon which
he or she relies in making such appeal. An appeal request shall be deemed filed
when received by the Committee.

     

    
      	
              (d)  

            	
              The
      Committee shall render a decision on the claim appeal promptly, but not
      later than sixty (60) days after the receipt of the Claimant’s request for
      review, unless special circumstances (such as the need to hold a hearing,
      if necessary), require an extension of time for processing, in which case
      the sixty (60) day period may be extended to one hundred twenty (120)
      days. The Committee shall notify the Claimant in writing of any such
      extension. The decision upon review shall be written in a manner
      reasonably calculated to be understood by the Claimant, and shall contain
      (i) the specific reason or reasons for denial of the claim; (ii) a
      specific reference to the pertinent Plan provisions upon which the denial
      is based; (iii) a statement that the Claimant shall be provided, upon
      request and free of charge, reasonable access to, and copies of, all
      documents, records, and other information relevant to the claim for
      benefits; and (iv) a statement of the Claimant’s right to bring an action
      under Section 502(a) of ERISA, if the adverse benefit determination is
      sustained on appeal.

            


    

     

    
      	
              (e)  

            	
              The
      Committee may provide written or electronic notification of any adverse
      benefit determination.  Any electronic notification shall comply
      with the standards imposed by 29 CFR 2520.104b-1(c)(1)(i), (iii) and
      (iv).

            


    

     

    
      	
              (f)  

            	
              No
      lawsuit by a Claimant may be filed prior to exhausting the Plan’s
      administrative appeal process. Any lawsuit must be filed no later than the
      earlier of one year after the Claimant’s claim for benefit was denied or
      the date the cause of action first
arose.

            


    

     

    


    Executed
at New Orleans, Louisiana this 29th day of December, 2008.

    


    


    WITNESSES:

    


    


    /s/
signed                                                            s/ Dean T.
Falgoust

    Dean T. Falgoust

    Vice-President

    /s/
signed                                

    



    
      
         


      

      
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    ACKNOWLEDGMENT

     

    STATE
OF LOUISIANA

    


    COUNTY
OF ORLEANS

    


    


    BEFORE
ME, the undersigned Notary Public, personally came and appeared DEAN T. FALGOUST
who, being by me sworn, did depose and state that he signed the foregoing
Amendment to the Freeport-McMoRan Copper & Gold Inc. Supplemental Executive
Capital Accumulation Plan as a free act and deed on behalf of Freeport-McMoRan
Copper & Gold Inc. for the purposes therein set forth.

    


                    /s/ Dean T.
Falgoust                                                                

    Dean
T. Falgoust

    Vice-President

    


    


    SWORN
TO AND SUBSCRIBED

    BEFORE
ME THIS 29th DAY

    OF
DECEMBER, 2008.

    


    


    


    /s/
signed                                              
                                                      

    NOTARY
PUBLIC

    My
Commission Expires:   _______

    



    
      
         


      

      
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