exhibit10_39.htm


    
      

    


    Exhibit
10.39

    


    


    McMoRan
EXPLORATION CO.

    SUPPLEMENTAL
EXECUTIVE CAPITAL ACCUMULATION PLAN

    AMENDMENT
TWO

    


     

    WHEREAS, McMoRan Exploration
Co. Supplemental Executive Capital Accumulation Plan (the “Plan”) was originally
adopted by Freeport-McMoRan Inc. on April 1, 1987 and later adopted by
Freeport-McMoRan Sulphur Inc. on December 22, 1997 and then adopted by McMoRan
Exploration Co. (the “Company”) on November 17, 1998 for the benefit of its
eligible employees;

     

    WHEREAS, Section 9.02 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 December 3, 2007;

     

    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 McMoRan Exploration Co.
2005 Supplemental Executive Capital Accumulation Plan (“MMR-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 McMoRan Exploration Co. 1987 Supplemental Executive Capital Accumulation
Plan; 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 9.02 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 McMoRan Exploration Co. 2005 Supplemental Executive
Capital Accumulation Plan (“MMR-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 McMoRan Exploration Co. 1987
Supplemental Executive Capital Accumulation Plan, and all references to the
McMoRan Exploration Co. Supplemental Executive Capital Accumulation Plan are
hereby amended accordingly, and the definition of “Plan” in Section 1.19 of
Article I of the Plan is hereby amended to read as follows:

    


    1.19           Plan
means this McMoRan Exploration Co. 1987 Supplemental Executive Capital
Accumulation Plan (“Plan” or “MMR-SECAP”) as set forth herein (formerly the
McMoRan Exploration Co. Inc. Supplemental Executive Capital Accumulation Plan
(“MMR-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 McMoRan Exploration Co. 2005 Supplemental Executive
Capital Accumulation Plan (“MMR-SECAP”).

    


    III.

     

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

     

    
      
        
        

      

      
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    3.02           MMR-SECAP
Basic Credit Account.  Effective January 1, 2009, the
Participant's MMR-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 MMR-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 MMR-ECAP.

    


    IV.

     

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

     

    
      	
               
      

            	
              (b)

            	
              Effective
      January 1, 2009, the Participant's MMR-SECAP Company Savings 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 MMR-SECAP Company Savings 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
      MMR-ECAP.

            


    

     

    V.

     

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

     

    
      	
               
      

            	
              (h)

            	
              Effective
      January 1, 2009, the Participant's MMR-SECAP Enhanced Company
      Contributions Credits and MMR-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.

            


    

     

    VI.

     

    The
following is added at the end of Section 4.02, Recordation
of Shares, to read as follows:

    


    Notwithstanding,
effective January 1, 2009, the assets described in this section shall be treated
as if invested by the Committee in a manner to produce a rate of 

     

    
      
        
        

      

      
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    interest
equal to the prime rate, as published in the Federal Reserve Statistical Report
at the beginning of each month.

     

    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.

     

    The
second sentence of Section 8.00, Committee,
is amended and restated, to read as follows:

    


    8.00
Committee.  Effective
December 3, 2007, the Board appointed members to the Administration Committee
(the "Committee") that will function as the Plan Administrator of this
Plan.  The members of the Committee currently consist of Nancy D.
Parmelee, Dean T. Falgoust, Pamela Q. Masson, Douglas N. Currault II and Chad A.
Ventola. 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 8.05, Claims
Procedures, is added to the Plan, effective January 1, 2008, to read as
follows:

    


    8.05           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)
      

            


    

     

    
      
        
        

      

      
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    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
      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.

            


    

     

    Signatures
are on the next page.

     

    
      
        
        

      

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

     

    


    WITNESSES:

    


    


    s/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 McMoRan Exploration Co. Supplemental Executive Capital
Accumulation Plan as a free act and deed on behalf of McMoRan Exploration Co.
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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