exhibit10_45.htm


    
      

    


     Exhibit
10.45

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    McMoRan
Exploration Co.

    Severance
Plan

    



    
      
        
                                                                    


        

         


      

      
         


        
          

        

      

      
         


      

    


    McMoRan
Exploration Co. (MMR)

    


    Severance
Plan

    


    


    WITNESSETH

     

    WHEREAS, McMoRan Exploration
Co. (referred to herein as “MMR” or the “Company”) originally adopted a welfare
benefit plan, the McMoRan Exploration Co. Severance Plan (the “Plan”), effective
November 6, 1997, and such Plan has been amended from time to time;

     

    WHEREAS, this Plan was amended
in 2006 to incorporate prior amendments, to comply in good faith with the
proposed treasury regulations under Section 409A of the Internal Revenue Code
(“Code”) and other applicable guidance, and to make other revisions for
clarification purposes;

     

    WHEREAS, the Internal Revenue
Service issued final Treasury Regulations under Code Section 409A on April 10,
2007 with corrections on July 13, 2007;

     

    NOW THEREFORE, the Plan is
hereby amended and restated effective as of the date signed; however, the
provisions to comply with Code Section 409A are effective January 1, 2008,
unless stated otherwise:

     

    ARTICLE
I

     

    DEFINITIONS

     

    
      	
              1.01  

            	
              Base
      Pay means the Employee’s
      annualized base rate of pay at the time of the Employee’s termination
      (excluding all bonuses, overseas premiums, employer paid portion of
      employee benefits, deferred compensation, and all other fringe benefits,
      but before withholding of payroll taxes and insurance
      premiums).  Notwithstanding the foregoing, if an Employee
      changes from full-time to part-time status in the twelve month period
      prior to termination, such Employee’s base pay will be determined based
      upon such Employee’s base rate of pay when employed on a full-time
      basis.

            


    

     

     

    
      	
              1.02  

            	
              Cause means
      (a) the Employee’s failure to perform the duties, obligations, or tasks
      assigned to him in a satisfactory manner; (b) the Employee’s failure to
      cooperate with the winding up and orderly transfer of pending work; (c)
      the Employee’s failure or refusal to acknowledge his or her existing and
      continuing obligation to maintain certain information as confidential; (d)
      dishonesty, gross negligence or willful misconduct by the Employee; (e)
      the conviction of the employee of, or the entry of a plea of guilty or
      nolo contendere by Employee to any crime involving moral turpitude or any
      felony; or (f) fraud, embezzlement or theft against the
      Company.

            


    

     

     

    
      	
              1.03  

            	
              Code means the Internal Revenue Code of 1986, as
      amended from time to
    time.

            


    

     

     

    
      	
              1.04  

            	
              Code Section
      409A  means
      Section 409A of the Code, and all Treasury Regulations and IRS
      guidance promulgated under or related to such Code
      section.

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              1.05  

            	
              Comparable
      Employment means employment: (i)
      that is not temporary or known to be of a limited duration; (ii) for which
      the total compensation package is determined to be reasonable by the Plan
      Administrator; (iii) that is reasonably consistent with the Employee’s
      abilities and skill as performed for the Employer prior to the date of the
      Employee’s termination or it is judged that such Employee has the ability
      to absorb training for the job as is necessary to enable that Employee to
      perform the job satisfactorily; (iv) that the Employee is physically able
      to perform; and (v) for which the distance from the present residence to
      the new work location is considered reasonable, all as determined by the
      Plan
Administrator.

            


    

     

     

    
      	
              1.06  

            	
              Company means McMoRan
      Exploration Co. and any successor to or assignee of (whether direct or
      indirect, by purchase, merger, consolidation or otherwise) all or
      substantially all of the assets of the
    Company.

            


    

     

     

    
      	
              1.07  

            	
              Core
      Company means
      Freeport-McMoRan, Inc. and its affiliates (prior to its merger into IMC
      Global), Freeport-McMoRan Copper & Gold Inc., FM Services Company, and
      its affiliates, McMoRan Oil & Gas Co. and Stratus Properties, Inc. and
      its affiliates (formerly FM Properties
      Inc.).

            


    

     

     

    
      	
              1.08  

            	
              Eligible
      Employee has the meaning attributed to it in Section
      2.01.

            


    

     

    
      	
              1.09  

            	
              Eligible
      Retiree means a Retiree
      as defined in the McMoRan Exploration Co. Retiree Benefit
      Plan.

            


    

     

     

    
      	
              1.10  

            	
              Employee means any
      person in full-time active service with the Participating Employer who is
      regularly assigned to work for the Employer, and is on the payroll of the
      Employer, excluding (a) any individual who is classified as an independent
      contractor or consultant; (b) any person who is covered by a collective
      bargaining agreement which does not provide that he is to be covered by
      this Plan; (c) any person who is classified by the Employer as a contract
      or leased employee or personnel or who is seconded or loaned from another
      employer; (d) any person considered a temporary employee or in a position
      known to be of a limited duration; (e) any person who is classified as an
      “extra” or “temp”; (f) any person who is employed by Copper Overseas
      Services Company pursuant to an employment contract that identifies the
      individual as a contract employee; and (g) any person who is a
      non-resident alien; provided, however, the Plan Administrator may in his
      sole discretion include as an Employee any non-resident alien employee of
      the Employer if such employee is paid from a payroll administered in the
      United States.  An “extra” or “temp” is an employee not
      scheduled for any specific number of hours and called in by the Employer
      on an “as needed”
basis.

            


    

     

     

    
      	
              1.11  

            	
              Employer means the
      Company and any Participating Employer.  Employer includes all
      members of a controlled group of corporations (within the meaning of Code
      Section 414(b)) that include the Employer, all trades or business (whether
      or not incorporated) that are included in a group of trades or businesses
      under common control (within the meaning of Code Section 414(c)) of the
      Employer.

            


    

     

     

    
      	
              1.12  

            	
              Involuntary Separation
      from Service means the
      Employer’s independent exercise of authority to terminate the Employee’s
      services, other than due to the Employee’s implicit
      

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     or
explicit request.  This may include an Employee’s failure to renew an
employment contract, provided the Employer was willing and able to execute a new
contract providing similar terms and conditions substantially similar to the
expiring contract.  The determination of whether a Separation from
Service is involuntary is based upon facts and circumstances.  For
example, if a separation from service is designated as a voluntary separation
from service or resignation, but the facts and circumstances indicate that
absent such voluntary separation from service the Employer would have terminated
the Employee’s services, and that the Employee had knowledge that the Employee
would be so terminated, the separation from service is
involuntary.  The Treasury Regulation Section 1.409A-1(n)(1)
definition of “involuntary separation from service” is incorporated
herein.

     

    
      	
              1.13  

            	
              Participating
      Employer means the
      Company, Freeport-McMoRan Energy L.L.C. (formerly Freeport-McMoRan
      Sulphur, Inc.), McMoRan Oil & Gas L.L.C. and any corporation that has
      been designated by the President of the Employer as a Participating
      Employer for the employees of which the benefits of this Plan are
      available.

            


    

     

     

    
      	
              1.14  

            	
              Plan
      means this McMoRan Exploration Co. Severance Plan, including any
      amendments or attachments adopted pursuant to Section
      5.02.

            


    

     

     

    
      	
              1.15  

            	
              Plan
      Administrator means the
      Company’s Administrative
  Committee.

            


    

     

     

    
      	
              1.16  

            	
              Plan
      Year means the calendar
      year.

            


    

     

     

    
      	
              1.17  

            	
              Retiree Benefit
      Plan means the
      McMoRan Exploration Co. Retiree Benefit
  Plan.

            


    

     

     

    
      	
              1.18  

            	
              Separation from
      Service  means a
      termination of employment with the Employer in such a manner as to
      constitute a “separation from service” as defined under Treasury
      Regulations Section 1.409A-1(h), for any reason other than
      death.

            


    

     

    Whether a
termination of employment has occurred is determined based upon whether the
facts and circumstances indicate that the Employer and Employee reasonably
anticipated that no further services would be performed after a certain date or
that the level of bona fide services the Employee would perform after such date
(whether as an employee or independent contractor) would permanently decrease to
no more than 20 percent of the average level of bona fide services performed
(whether as an employee or independent contractor) over the immediately
preceding 36-month period (or, if employed less than 36 months, such lesser
period).

     

    An unpaid
bona fide leave of absence is disregarded in determining the average level of
bona fide services during the 36 month period (or, if employed less than 36
months, such lesser period) and a paid bona fide leave is considered at a level
equal to the level of services that the employee would have been required to
perform to receive the compensation paid with respect to such
leave.

     

    Facts and
circumstances to be considered in making a determination of Separation from
Service include, but are not limited to, whether the Employee continues to be
treated as an employee for other purposes (such as continuation of salary and
participation in employee benefit programs), whether similarly situated
Employees have been treated 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    consistently,
and whether the Employee is permitted and realistically available to perform
services for other service recipients in the same line of business.

     

    An
Employee is presumed to have separated from service where the level of bona fide
services decrease as described above.  An Employee will be presumed
not to have separated from service where the level of bona fide services
performed continues at a level that is 50 percent or more over the immediately
preceding 36-month period.  No presumption applies to a decrease that
is more than 20% and less than 50%.  This presumption is rebuttable if
an Employee must return to employment due to business circumstances, such as the
termination of the employee’s replacement.

     

    A
Separation from Service has not occurred while the Employee is on military
leave, sick leave, or other bona fide leave of absence if the period does not
exceed six months, or if longer, so long as the Employee retains the right to
reemployment with the Employer under an applicable statute or by
contract.  A leave of absence constitutes a bona fide leave of absence
only if there is a reasonable expectation that the Employee will return to
perform services for the Employer.  A 29-month period may be
substituted for the six-month period for certain medical leaves of
absence.

     

    Treasury
Regulation Section 1.409A-1(h)(1) definitions of “separation from service”,
leave of absence, and termination of employment are incorporated
herein.

     

    
      	
              1.19  

            	
              Separation
      Pay means
      compensation that will not be paid under any circumstances unless the
      Employee has had a Separation from Service, including payments in the form
      of reimbursements of expenses incurred and the provision of in-kind
      benefits.  Separation Pay includes amounts payable due to a
      Separation from Service, regardless of whether payment is conditioned upon
      the execution of a release of claims, non-competition or nondisclosure
      provisions, or other similar requirement.  Notwithstanding the
      foregoing, any amount, or entitlement to any amount, that acts as a
      substitute for, or replacement of, amounts deferred by the service
      recipient under a nonqualified deferred compensation plan constitutes a
      payment of compensation or deferral of compensation under such
      nonqualified deferred compensation
  plan.

            


    

     

     

    
      	
              1.20  

            	
              Weekly Base Pay or
      Weeks of Base Pay means Base Pay
      divided by 52.

            


    

     

     

    
      	
              1.21  

            	
              Window
      Program means a program
      established by an Employer, for a period of no more than twelve months,
      under which Employees who voluntarily Separate from Service during that
      period or who separate under certain circumstances will receive Separation
      Pay.  The definition of “Window Program” in Treasury Regulation
      Section 1.409A-1(b)(9)(vi) is incorporated
      herein.

            


    

     

     

    
      	
              1.22  

            	
              Years of
      Service means the
      period commencing on the first day of employment with the Employer or Core
      Company and ending upon a Separation from Service; subject to the
      following
adjustments:

            


    

     

    Years of
Service prior to a reemployment date are not counted if the Employee previously
received a severance benefit relating to such Years of Service, determined based
upon Years of Service, under this or another Employer or Core Company’s
severance plan;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    In
calculating an Eligible Employee’s severance benefit, if an Employee is
terminated pursuant to the provisions of this Plan after completing at least six
months of his final employment year, such partial year of employment will be
counted as a full Year of Service;

     

    Years of
Service through the period of short-term disability will be counted; however,
periods of long-term disability will not be counted;

     

    Years
when employed in a category of employment that is not eligible under the Plan
are ignored; and

     

    Years of
Service shall not include any period during which an individual is classified as
a leased employee, benefits contractor, contractor, or independent contractor
(without regard to such person’s status for Federal income tax purposes and
without regard to any subsequent determination that such individual is a common
law employee).

     

    ARTICLE
II

    ELIGIBILITY

     

    
      	
              2.01  

            	
              Eligible Employee.  Except as otherwise provided in Sections 2.02
      and 2.03, an Employee is eligible to receive the pay and benefits of this
      Plan if:

            


    

     

     

    
      	
              (a)  

            	
              he
      or she is considered actively employed on the scheduled work day preceding
      the effective date of his or her termination due to a change in business
      needs or a reduction in force or applicable event and (i) is involuntarily
      terminated or involuntarily retired by the Employer or (ii) he or she
      becomes eligible under an event amendment in Section 2.03(b) hereof;
      and

            


    

     

    
      	
              (b)  

            	
              if
      applicable to the Employee’s position, such Employee is a participant in
      the Employer’s Annual Business Ethics/Conflicts of Interest Certification
      process relating to the year of termination and the preceding year (if
      applicable).  The Employee will be permitted to complete the
      annual Business Ethics/Conflicts of Interest questionnaire within a
      reasonable period of time following termination of
      employment.  Such Employee will have participated in the Annual
      Business Ethics/Conflicts of Interest Certification process when he or she
      has read the Company’s Business Conduct Policy and either completes the
      Annual Business Ethics/Conflicts of Interest Certifications or notifies
      the Company’s compliance officer of any facts that should be investigated
      to determine whether or not the Business Conduct Policy was
      violated.

            


    

     

    
      	
              2.02  

            	
              Ineligible
      Employee.  An Employee is not eligible for severance pay
      and/or benefits under this Plan if the Employee
      was:

            


    

     

     

    
      	
              (a)  

            	
              Termination for
      Cause.  Discharged for Cause as determined by the Plan
      Administrator;

            


    

     

     

    
      	
              (b)  

            	
              Voluntary
      Separation.  Voluntarily separated from the Employer,
      unless such separation is pursuant to a Window Program established by the
      Employer and provided in an event
      amendment;

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              Death.  Separated from the Employer by reason of
      death;

            


    

     

     

    
      	
              (d)  

            	
              Other Events.  Terminated for any reason, event, or cause
      outside of the control of the Employer, such as a natural disaster, act of
      God or war;

            


    

     

     

    
      	
              (e)  

            	
              Insolvency.  Terminated as
      a result of the insolvency, voluntary or involuntary bankruptcy, assignment for the benefit
      of creditors or similar action taken by the Employer or by a related
      entity by which the Employee was
      employed;

            


    

     

     

    
      	
              (f)  

            	
              Leave of Absence or
      Disability.  Not actively at work and receiving long-term
      disability benefits or has been on leave for a period of six months or
      more;

            


    

     

     

    
      	
              (g)  

            	
              Comparable
      Employment.  Offered and accepted Comparable Employment
      with the Employer, a Core Company or a Participating Employer or a company
      which acquires some or all of the assets of the operations in which the
      Employee is
employed.

            


    

     

     

    
      	
              (h)  

            	
              Contract or Consulting
      Services.  Further, an Employee who has terminated
      employment with the Employer but continues to provide services as a
      consultant or advisor to, or through an entity that provides services to,
      the Employer or a Core Company.  Such services provided to the
      Employer or Core Company pursuant to this paragraph (h) must be deemed by
      the Plan Administrator to be Comparable Employment in order for this
      paragraph (h) to
apply.

            


    

     

     

    
      	
              2.03  

            	
              Eligible
      Termination Benefits.  An Employee whose employment is terminated
      under the circumstances described in Section 2.01 shall receive, subject
      to Section 2.02, benefits under this Plan pursuant to one of the
      following:

            


    

     

     

    
      	
              (a)  

            	
              Involuntary
      Separation from
      Service.  An Employee who is not an Eligible Retiree
      will receive the benefits described in Article III except for Retiree
      Medical.  An Employee who is an Eligible Retiree will receive
      the benefits described in Article
  III.

            


    

     

     

    
      	
              (b)  

            	
              Voluntary Window
      Program.  An Employee, including an Eligible Retiree,
      who meets the eligibility requirements of this Plan, and elects to
      voluntarily terminate pursuant to a Window Program will receive the
      severance and medical benefits in Article III if provided in an event
      amendment to this
Plan.

            


    

     

     

    ARTICLE
III

    SEVERANCE
BENEFITS

     

    
      	
              3.01  

            	
              Severance.

            


    

     

     

    
      	
              (a)  

            	
              Severance Pay.  The Eligible Employee will receive severance
      payment(s) equal to four Weeks of Base
      Pay.

            


    

     

     

    
      	
              (b)  

            	
              Reductions.  The
      amount of severance benefit paid to any Employee shall be reduced by any
      amount required to be paid to such Employee on account of the same
      separation under the Worker Adjustment and Retraining Notification Act.
      

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Alternatively, any amount required to be paid under the Worker
Adjustment and Retraining Notification Act, if any, shall be offset by the
severance benefit paid under this Plan on account of the same separation from
employment.

     

     

    
      	
              (c)  

            	
              Employment
      Agreements. To the
      extent an Employee is a party to an Employment Agreement with the Company
      that provides severance benefits that are more favorable than the benefits
      provided herein, the Employee shall be paid the severance benefits under
      the Employment Agreement and shall not receive severance benefits provided
      in the Plan.  If a conflict exists between this document and
      another agreement, the other agreement
    applies.

            


    

     

     

    
      	
              3.02  

            	
              Welfare and Other
      Benefits.

            


    

    
      	
              (a)  

            	
              This
      Section 3.02 regarding reimbursements or in-kind payments applies to
      involuntary or voluntary terminations.  The reimbursements must
      be directly related to the Separation from
  Service.

            


    

     

    
      	
              (b)  

            	
              Medical and Dental
      COBRA Coverage.  If an Eligible Employee
      (and his dependents, if applicable) is eligible for and elects COBRA
      continuation group health and dental coverage during the COBRA election
      period, the Company will pay the full cost of that coverage for the
      following time
periods:

            


    

     

     

    
      	
              (i)  

            	
              If
      the Employee has one or more Years of Service, for a six month period
      beginning on the first day of the month following the month in which the
      termination occurred; or

            


    

     

    
      	
              (ii)  

            	
              If
      the Employee has less than one Year of Service, for a three month period
      from the first day of the month following the month in which the
      termination occurred.

            


    

     

    The
Company will bear the cost of COBRA continuation health and dental coverage
until the earlier of:  (i) the three or six month period outlined
above or (ii) the date the Employee’s COBRA coverage would otherwise end, e.g.,
if the Employee becomes eligible for Medicare or participation in another
company’s group health plan, or if the Company’s group health plan
terminates.  Thereafter, the Employee will be responsible for paying
the full COBRA premium for the remainder of the COBRA continuation coverage
period.

     

    
      	
              (c)  

            	
              Retiree Medical.  If the
      Employee is an Eligible Retiree such individual will be eligible for
      benefits under the Retiree Benefit Plan in lieu of medical and dental
      COBRA coverage described in Section 3.02(b).  If the Eligible
      Retiree is involuntarily terminated, the Company will pay
      the full cost of
      Retiree Benefit Plan coverage for a six month period beginning on the
      first day of the month following the month in which the termination
      occurred.

            


    

     

     

    
      	
              (d)  

            	
              Other Plan
      Benefits.  Participation in the employee benefit programs
      of the Employer will cease on or after the date of termination as
      determined by the provisions of the individual benefit programs of the
      Employer.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
              3.03  

            	
              Deductions.  Appropriate withholdings and deductions will
      be made.

            


    

     

     

    ARTICLE
IV

    DISTRIBUTION
PROVISIONS

     

    
      	
              4.01  

            	
              Form and Timing of
      Payment.

            


    

     

     

    
      	
              (a)  

            	
              Involuntary
      Termination as a Short Term Deferral -
      If an Employee involuntarily Separates
      from Service or participated in a Window Program, the Separation Pay will
      be paid in lump sum upon the Separation from Service date, within the same
      calendar year or, if later, by March 15 following the calendar year in
      which the Separation from Service occurs.  Payment may be
      delayed due to unforeseeable circumstances as described in Treasury
      Regulation Section
      1.409A-1(b)(4)(ii).

            


    

     

    
      	
              (b)  

            	
              Reimbursements
      - The period during which expenses described in Section 3.02 may be
      incurred, or during which in-kind benefits may be provided by the Employer
      or a third party paid by the Employer, cannot extend beyond the last day
      of the second taxable year (December 31) of the Employee following the
      taxable year of the Employee in which the Separation from Service
      occurred.  The period during which reimbursements for such
      expenses must be paid may not extend beyond the third taxable year of the
      Employee following the taxable year of the Employee in which the
      Separation from Service occurred.  See Treasury Regulations
      Section 1.409A-1(b)(9)(v).

            


    

     

    
      	
              (c)  

            	
              Effect of Death on
      Benefits - If a Separation Payment is due but not
      yet paid as of the Employee’s death, such benefit will be paid to the
      Employee’s beneficiary no later than the later of December 31 of the year
      in which the death occurs, or the 15th
      day of the third month following the month in which the death
      occurs.  The payment will be made to the beneficiary who would
      receive Employer provided Basic Life insurance benefits with respect to
      the Employee.
    

            


    

     

    
      	
              4.02  

            	
              Exemptions to
      Circumvent Code Section 409A(a) .  The exemptions for Separation Pay arrangements
      described in this Article can not be used to pay deferred compensation
      that may be payable to an Employee under a separate nonqualified deferred
      compensation arrangement, such as the Supplemental Executive Capital
      Accumulation
Plan.

            


    

     

     

    ARTICLE
V

    GENERAL
PROVISIONS

     

    
      	
              5.01  

            	
              Non-Assignment of
      Severance.  The
      right to severance payments to be made in accordance with this Plan may
      not be assigned

            


    

     

    .

    
      	
              5.02  

            	
              Plan Amendment and
      Termination.  The Plan may
      be amended or terminated at any time by the Plan Administrator in its
      discretion; provided, however, that no amendment or termination may
      decrease or eliminate benefits to which an Employee has previously become
      entitled hereunder.  If the Company amends this Plan, Code
      Section 409A provisions may apply that require a delay in payment to
      Specified Employees.  Specified Employee means an Employee who
      is a key employee of the Employer under Code
      

            


    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    Section 409A(a)(2)(B) and Treasury Regulations Section 1.409A-1(i) because of final and binding
action by the Board of Directors or its delegate, or by operation of law or such
regulation.

     

    
      	
              5.03  

            	
              Interpretation of the
      Plan.  The Plan
      Administrator, or its authorized designee(s), shall have the sole
      discretionary authority to construe and interpret the Plan and determine
      all questions of eligibility for participation and for
      benefits.  All decisions of the Plan Administrator shall be
      final and binding on all
    parties.

            


    

     

     

    
      	
              5.04  

            	
              Funding.  The Company shall pay the benefits under this
      Plan out of its general assets at the time the benefits are to be
      paid.

            


    

     

     

    
      	
              5.05  

            	
              Named Fiduciary, Plan
      Administrator, and Agent for Service of Process.  Administrative Committee, McMoRan Exploration
      Co., c/o FM Services Company, 1615 Poydras Street, New Orleans, LA 70112,
      (504) 582-4000, is the “named fiduciary and Plan Administrator” of this
      Plan.  The named fiduciary shall have the authority to control
      and manage the operation and administration of this Plan and is designated
      as the administrator of this Plan with the authority to interpret this
      Plan.  The Plan Administrator shall make all reports and
      disclosures required by
  law.

            


    

     

     

    
      	
              5.06  

            	
              Plan Sponsor and
      Number.  The Plan Sponsor is McMoRan Exploration Co.
      (EIN: 72-1392855), c/o FM Services Company, 1615 Poydras Street, New
      Orleans, LA 70112.  A complete list of the Employers
      participating in this Plan may be obtained from the Plan Administrator at
      this address.  This Plan has been assigned number
      531.

            


    

     

     

    
      	
              5.07  

            	
              Claims Procedures.  Benefits
      under the Plan will ordinarily be paid without the need to file a request
      for payment.  Any inquiry, any transaction or any claim for
      benefits under this Plan shall be made as
      follows:

            


    

     

     

    
      	
              (a)  

            	
              Filing of a Claim for
      Benefits.  Claims for benefits under the Plan are
      to be presented in writing by the claimant or an authorized representative
      to the employee’s Human Resources
      Department.

            


    

     

     

    
      	
              (b)  

            	
              Notification to
      Claimant of Decision.  If a claim is wholly or partially denied, a
      notice of the decision rendered in accordance with the rules set forth
      below will be furnished to the claimant not later than 90 days after
      receipt of the claim by the employee’s Human Resources
      Department.

            


    

     

    If
special circumstances require an extension of time for processing the claim, the
Plan Administrator will give a claimant a written notice of the extension prior
to the end of the initial 90 day period.  In no event will the
extension exceed an additional 90 days.  The extension notice will
indicate the special circumstances requiring an extension of time and the date
by which the Plan Administrator expects to render the final
decision.

     

    If the
notice of the denial of claim is not furnished in accordance with the procedure
set out herein, the claim will be deemed denied and the claimant will be
permitted to proceed to the review stage.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              (c)  

            	
              Content of
      Notice.  The
      Plan Administrator will provide to every claimant who is denied a claim
      for benefits written or electronic notice setting forth in a clear and
      simple manner:

            


    

     

     

    
      	
              (i)  

            	
              The
      specific reason or reasons for
denial;

            


    

     

    
      	
              (ii)  

            	
              Specific
      reference to pertinent plan provisions on which denial is
      based;

            


    

     

    
      	
              (iii)  

            	
              A
      description of any additional material or information necessary for the
      claimant to perfect the claim and an explanation of why such materials or
      information is necessary; and

            


    

     

    
      	
              (iv)  

            	
              Appropriate
      information as to the steps to be taken if the claimant wishes to submit
      his or her claim for review, including the right to bring a civil action
      under ERISA Section 502(a) following an adverse determination on
      review.

            


    

     

    
      	
              (d)  

            	
              Review Procedure.  After the claimant has received written
      notification of the denial of the claim, the claimant or a duly authorized
      representative will have 60 days within which to appeal, in writing, a
      denied claim to the Plan Administrator.  The Plan Administrator
      will afford the claimant a full and fair review of the denial of the
      claim.  The claimant should include in his written appeal the
      following information to support his claim for
      benefits:

            


    

     

    
      	
              (i)  

            	
              A
      list of the issues in the claim denial that he chooses to contest, if any,
      and that he wishes the Plan Administrator to review on
    appeal;

            


    

     

    
      	
              (ii)  

            	
              His
      position on each issue;

            


    

     

    
      	
              (iii)  

            	
              Any
      additional facts that he believes support his position on each issue;
      and

            


    

     

    
      	
              (iv)  

            	
              Any
      legal or other arguments he believes support his position on each
      issue.

            


    

     

    
      	
              (v)  

            	
              The
      claimant or a duly authorized representative will be permitted to submit
      issues and comments relevant to the claim.  Upon request, the
      claimant will be given reasonable access to, and copies of, all documents
      and information relevant to the claim for benefits, at no
      charge.

            


    

     

    
      	
              (vi)  

            	
              The
      review will consider all items submitted by the claimant, regardless of
      whether such information was submitted or considered in the initial
      benefit determination.

            


    

     

    
      	
              (e)  

            	
              Decision on
      Review.  The
      decision on review by the Plan Administrator will be rendered as promptly
      as is feasible, but not later than 60 days after the receipt of a request
      for review unless the Plan Administrator, in his sole discretion,
      determines that special circumstances require an extension of time for
      processing, 

            


    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    in which
case a decision will be rendered as promptly as is feasible, but not later than
120 days after receipt of a request for review.

     

    If an
extension of time for review is required because of special circumstances,
written notice of the extension will be furnished to the claimant before
termination of the initial 60-day review period.

     

    The
decision on review will be in written or electronic form.  In the
event of a claim denial, the decision shall contain:  (1) specific
reasons for the decision, written in a clear and simple manner; (2) specific
references to the pertinent plan provisions on which the decision is based; (3)
a statement that the claimant may request, at no charge, reasonable access to
and copies of all documents, records and other information relevant to the claim
for benefits; and (4) a description of the Plan’s appeal and arbitration
procedures (if any), and the claimant’s right to bring an action under ERISA
Section 502(a).

     

    If the
claimant wishes to contest the Plan Administrator’s Decision on Review, the
claimant and the Plan Administrator may enter into voluntary arbitration to
resolve the dispute.  The decision reached by the arbitrator shall be
binding.  Alternatively, the claimant may bring a civil action for
recovery of benefits.

     

    No legal
action for recovery of benefits may be commenced before the claimant has
exhausted the claims and claims review procedure listed above.

     

    
      	
              5.08  

            	
              ERISA Rights.  Employees are entitled to certain rights and
      protections under the Employee Retirement Income Security Act of 1974,
      Public Law 93-406, 29 U.S.C. §1001 et seq., and regulations and rulings
      issued thereunder, as amended from time to time (ERISA).  ERISA
      provides that all plan participants shall be entitled
      to:

            


    

     

    Receive
Information About the Plan and its Benefits

     

    Examine,
without charge, at the Plan Administrator’s office and at other specified
locations, such as worksites, all documents governing the Plan, and a copy of
the latest annual report (Form 5500 Series) filed by the plan with the U.S.
Department of Labor and available at the Public Disclosure Room of the Pension
and Welfare Benefit Administration.

     

    Obtain,
upon written request to the Plan Administrator, copies of documents governing
the Plan and copies of the latest annual report (Form 5500 Series). The
Administrator may make a reasonable charge for the copies.

     

    Prudent
Actions by Plan Fiduciaries

     

    In
addition to creating rights for plan participants ERISA imposes duties upon the
people who are responsible for the operation of the Plan. The people who operate
the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and
in the interest of Plan participants and beneficiaries.  No one,
including the Employer, a union, or any other person, may fire an Employee or
otherwise discriminate against an Employee in any way to prevent him or her from
obtaining a benefit or exercising rights under ERISA.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Enforcing
ERISA Rights

     

    If a
claim for a benefit is denied or ignored, in whole or in part, participants have
a right to know why this was done, to obtain copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time
schedules.

     

    Under
ERISA, there are steps participants can take to enforce the above rights. For
instance, if a participant requests a copy of plan documents or the latest
annual report from the plan and does not receive them within 30 days, he or she
may file suit in a Federal court. In such a case, the court may require the Plan
Administrator to provide the materials and pay the participant up to $110 a day
until the materials are received, unless the materials were not sent because of
reasons beyond the control of the Administrator. If a participant’s claim for
benefits is denied or ignored, in whole or in part, or a participant is
discriminated against for asserting his or her rights, he or she may seek
assistance from the U.S. Department of Labor, or may file suit in a Federal
court. The court will decide who should pay court costs and legal fees. If the
participant is successful, the court may order the person sued to pay these
costs and fees. If the participant loses, the court may order him or her to pay
these costs and fees, for example, if it finds the claim frivolous.

     

    Assistance
with Questions

     

    Participants
with questions about the Plan should contact the Plan
Administrator.  Participants who have questions about this statement
or about their rights under ERISA, or who need assistance in obtaining documents
from the Plan Administrator, should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in the
telephone directory or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210.  Participants may
also obtain certain publications about their rights and responsibilities under
ERISA by calling the publications hotline of the Employee Benefits Security
Administration.

     

    
      	
              5.09  

            	
              Governing Law.  To the extent this Plan is not governed by the
      Employee Retirement Income Security Act, the Internal Revenue Code, or
      other federal law, it shall be interpreted and construed under the laws of
      the State of Louisiana.
    

            


    

     

    


    


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

    


    McMoRan
Exploration Co.

    


    


    /s/
Dean T. Falgoust

        
Dean T. Falgoust

        
Vice President


    
      
        
          


                                                                         


        

         


      

      
        12