Document:

Exhibit 10.42

Exhibit 10.42

SEVERANCE AND CHANGE OF CONTROL AGREEMENT

SEVERANCE AND CHANGE OF CONTROL AGREEMENT (“Agreement”), dated as of December 10, 2010 (the
“Effective Date”) by and between SMART Modular Technologies (WWH), Inc. (the “Company”), and John
Moyer (“Executive”).

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of
the parties set forth in this Agreement, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:

ARTICLE 1

Definitions

Section 1.01 Definitions. For purposes of this Agreement, the following definitions shall
have the following meanings:

(i) “Cause” shall mean the occurrence of one or more of the following: (A) an act of
material fraud or material dishonesty made by Executive against the Company in connection
with Executive’s responsibilities which the Company reasonably believes will damage its
business; (B) Executive’s conviction of, or plea of nolo contendere to, a felony (excluding
traffic offenses) which the Board of Directors reasonably believes had or will have a
material detrimental effect on the reputation or business of the Company or its affiliates;
(C) Executive’s intentional or gross misconduct; (D) Executive’s intentional improper
disclosure of confidential information; (E) Executive’s continued material violations of
material Company policies or material provisions of Executive’s agreements with the
Company, after written notice from the Company or one of its affiliates, and a reasonable
opportunity of not less than 30 days to cure (to the extent capable of cure) such
violations; (F) Executive’s failure to cooperate with the Company in any investigation or
formal proceeding; or (G) Executive’s continued material violations of Executive’s duties,
or repeated material failures or material inabilities to perform any reasonably assigned
duties, after written notice from the Company or one of its affiliates, and a reasonable
opportunity of not less than 30 days to cure (to the extent capable of cure) such
violations, failures or inabilities.

(ii) “Change of Control” means the occurrence of any one or more of the following:

(A) the consummation of a merger or consolidation of the Company with or into
any other entity (other than with any entity or group in which Executive has not
less than a 5% beneficial interest) pursuant to which the holders of outstanding
equity of the Company immediately prior to such merger or consolidation, hold
directly or indirectly 50% or less of the voting power of the equity securities of the
surviving entity;

 

 

 

(B) the sale or other disposition of all or substantially all of the
Company’s assets (other than to any entity or group in which Executive has not
less than a 5% beneficial interest); or

(C) any acquisition by any person or persons (other than any entity or group
in which Executive has not less than a 5% beneficial interest) of the beneficial
ownership of more than 50% of the voting power of the Company’s equity securities
in a single transaction or series of related transactions; provided, however, that
an underwritten public offering of the Company’s securities shall not be
considered a Change of Control;

(D) if during any period of 12 consecutive months, individuals who at the
beginning of any such period constitute the Board, cease for any reason to
constitute at least a majority thereof, unless the election, or the nomination for
election by the Company’s stockholders, of each director of the Company first
elected during such period was approved or recommended by at least a majority of
the directors then still in office who were directors of the Company at the
beginning of any such period and any such newly approved directors;

provided, however, that a transaction shall not constitute a Change of Control if its sole purpose
is to change the state or jurisdiction of the Company’s incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons who directly or
indirectly held the Company’s securities immediately before such transaction.

(iii) “Equity Awards” means all options to purchase shares of Company common stock as
well as any and all other stock-based awards granted to the Executive, including but not
limited to stock bonus awards, restricted stock, restricted stock units, stock appreciation
rights and performance-based stock awards.

(iv) “Good Reason” means:

(A) a material diminution in base or total cash compensation, other than a
Company-wide salary reduction program;

(B) a material diminution in title, operational duties or responsibilities;
provided that, for the avoidance of doubt, Good Reason shall not have occurred if
after a change of control of the Company, Executive is performing substantially
the same duties and responsibilities as before the change of control but the
Company (or its successor) is a larger organization, or Executive is performing
such duties and responsibilities for a business unit of a parent entity that is a
larger organization than Company was before the change of control and the business
unit continues substantially all of the business of the Company;

 

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(C) relocation of Executive’s primary work location by at least 50 miles; or

(D) the failure of the successor entity to assume any agreement that
Executive had with the Company;

provided that notwithstanding the foregoing, an Executive’s termination will not be for
Good Reason unless the Executive (x) notifies the Company in writing of the existence of
the condition which the Executive believes constitutes Good Reason within 90 days of the
initial existence of such condition (which notice specifically identifies such condition),
(y) gives the Company at least 30 days following the date on which the Company receives
such notice (and prior to termination) in which to remedy the condition (to the extent such
condition is capable of being cured), and (z) if the Company does not remedy such condition
within such period, and Executive actually terminates employment within 30 days after the
expiration of such remedy period.

ARTICLE 2

Term And Nature Of Agreement

Section 2.01. Term. This Agreement shall be in force until the fourth anniversary of the
Effective Date, and thereafter renew for automatic one-year terms, unless at least 30 days before
the expiration of the then-current term the Company shall give the Executive written notice of
termination of this Agreement as of the end of the then-current term; provided that the Company may
not give such notice if a Change of Control has occurred prior to such date until at least 12
months following such Change of Control.

Section 2.02. At-Will Employment. Nothing in this Agreement shall change the at-will nature
of Executive’s employment with the Company.

ARTICLE 3

Severance and Change of Control Benefits

Section 3.01. Severance Benefits.

(a) If Executive is terminated by the Company without Cause, Executive shall be entitled to
all of the following (the “Severance Benefits”), provided that Executive executes and lets become
effective, a release of claims in substantially the form attached hereto as Exhibit A (the
“Release”) within the period of time specified by the Company (which shall be 21 days to sign and 7
days to revoke, unless a longer period is required by law) following the termination of employment:

(i) a lump sum cash payment within 60 days following termination of employment
(subject to Section 5.12 below) equal to:

(A) 0.5 times Executive’s then existing annual base salary;

 

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(B) to the extent any bonus could be earned in the current fiscal year under
the terms of the Company’s bonus program but is not yet earned or paid, a prorated
bonus (based on the determination by the Company’s compensation committee
(“Compensation Committee”) of Company performance through the date of
termination), prorated through the date of termination; and

(ii) payment or reimbursement of health benefit continuation coverage under COBRA or
otherwise from the termination date through the earlier of (A) 6 months following the
termination date or (B) the date Executive becomes eligible for health benefits with
another employer, which shall be paid no later than the due date for such coverage.

Section 3.02. Treatment of Performance-Based Equity on Change of Control. Upon a Change of
Control, to the extent Executive holds any Equity Awards that remain subject to issuance or vesting
based on performance (the “Performance Awards”), a prorated portion of the Performance Awards shall
become issued and/or vested upon the Change of Control based on performance measured immediately
prior to the Change of Control (as determined by the Compensation Committee prior to the Change of
Control), and the remainder of the Performance Awards (the
“Remainder Awards”) shall issue and/or
vest in equal monthly installments over the original performance period (unless accelerated under
Section 3.03 below); provided, that if the successor to the Company does not assume or
substitute the Remainder Awards with a substantially equivalent award, the amount of the Remainder
Awards shall become issued and/or vested upon the Change of Control.

Section 3.03. Change of Control Severance Benefits.

(a) If within two months prior to, or within 12 months following, a Change of Control,
Executive is terminated by the Company without Cause or Executive resigns for Good Reason,
Executive shall be entitled to the following (“Change of Control Severance Benefits”) in lieu of
any Severance Benefits under Section 3.01 above, provided that Executive executes and lets
become effective the Release within the period of time specified by the Company (which shall be 21
days to sign and 7 days to revoke, unless a longer period is required by law) following the
termination of employment:

(i) a lump sum cash payment within 60 days following termination of employment
(subject to Section 5.12 below) equal to:

(A) 1 times Executive’s then existing annual base salary;

 

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(B) 1 times the cash bonus paid or payable for the most recently completed
fiscal year (in addition to the cash bonus paid or payable with respect to the
most recently completed fiscal year); and

(C) to the extent any bonus could be earned in the current fiscal year under
the terms of the Company’s bonus program but is not yet earned or paid, a prorated
bonus (based on the Compensation Committee’s determination of Company performance
through the date of termination), prorated through the date of termination;

(ii) payment or reimbursement of health benefit continuation coverage under COBRA or
otherwise from the termination date through the earlier of (A) 12 months following the
termination date or (B) the date Executive becomes eligible for health benefits with
another employer, which shall be paid no later than the due date of payments for such
coverage; provided that if Executive is no longer eligible for COBRA continuation coverage,
the Company may provide a lump sum payment calculated based on the monthly premiums
immediately prior to the expiration of COBRA coverage; and

(iii) 50% of all of the Executive’s unvested and outstanding Equity Awards (including
the Performance Awards) shall become vested.

Section 3.04. Resignation of Corporate Offices. In connection with any termination of
employment, Executive will resign Executive’s office, if any, as a director, officer, trustee or
employee of the Company, its subsidiaries or affiliates and of any other corporation or trust of
which Executive serves as such at the request of the Company, effective as of the date of
termination of employment.

Section 3.05. Accrued Compensation and Benefits. In connection with any termination of
employment upon or following a Change of Control (whether or not under Section 3.01 above),
the Company shall pay Executive’s earned but unpaid base salary and other vested but unpaid cash
entitlements for the period through and including the termination of employment, including unused
earned vacation pay and unreimbursed documented business expenses incurred by Executive prior to
the date of termination (collectively “Accrued Compensation and Expenses”), as required by law and
the applicable Company plan or policy. In addition, Executive shall be entitled to any other vested
benefits earned by Executive for the period through and including the termination date of
Executive’s employment under any other employee benefit plans and arrangements maintained by the
Company, in accordance with the terms of such plans and arrangements, except as modified herein
(collectively “Accrued Benefits”). Any Accrued Compensation and Expenses to which the Executive is
entitled shall be paid to the Executive in cash as soon as administratively practicable after the
termination, and, in any event, no later than two and one-half (2-1/2) months after the end of the
taxable year of the Executive in which the termination occurs. Any Accrued Benefits to which the
Executive is entitled shall be paid to the Executive as provided in the relevant plans and
arrangement.

 

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Section 3.06. Continuing Obligations. Executive acknowledges his or her continuing
obligations under the Employment, Confidential Information and Invention Assignment Agreement (or
similar agreement) with the Company (the “Confidentiality Agreement”), including but not limited to
Executive’s obligations not to use or disclose, at any time, any trade secret, confidential or
proprietary information of the Company.

Section 3.07. Limitation on Change of Control Payments.

(a) If the Change of Control Severance Benefits together with any other payment or benefit
Executive would receive pursuant to a Change of Control (collectively, “COC Payment”) would (i)
constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed
by Section 4999 of the Code (the “Excise Tax”), then such COC Payment shall be equal to the Reduced
Amount. The “Reduced Amount” shall be either (x) the largest portion of the COC Payment that would
result in no portion of the COC Payment being subject to the Excise Tax or (y) the largest portion,
up to and including the total, of the COC Payment, whichever amount, after taking into account all
applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all
computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax
basis, of the greater amount of the COC Payment notwithstanding that all or some portion of the COC
Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the COC Payment equals the Reduced Amount, reduction
shall occur in the following order (in case prorated between those not subject to Section 409A and
those subject to Section 409A as deferred compensation): (1) reduction of cash payments; (2)
cancellation of acceleration of vesting; and (3) reduction of non-cash employee benefits. In the
event that acceleration of vesting is to be reduced, it shall be cancelled in the reverse order of
the date of grant of the Equity Awards. To the extent any such benefit is to be provided over
time, then the benefit shall be reduced in reverse chronological order.

(b) The Company may engage the accounting firm engaged by the Company for general audit
purposes as of the day prior to the effective date of the Change of Control or another firm to
perform the foregoing calculations. The Company shall bear all expenses with respect to the
determinations by such firm required to be made hereunder.

(c) The accounting firm engaged to make the determinations hereunder shall be engaged by the
Company to provide its calculations, together with detailed supporting documentation, to Executive
and the Company within fifteen (15) calendar days after the date on which Executive’s right to a
COC Payment is triggered (if requested at that time by Executive or the Company) or such other time
as requested by Executive or the Company.

 

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ARTICLE 4

Executive Covenants 

Section 4.01. Confidentiality and Non-Disclosure Agreement. Executive agrees to continue to
comply with the Confidentiality Agreement during and after the term of this Agreement.

Section 4.02. Non-Solicitation; Non-Disparagement.

(a) Without limiting the terms of the Confidentiality Agreement, Executive agrees that during
his employment with the Company and for a period of 12 months thereafter, he shall not, on his own
behalf or on behalf of or in connection with any other person, without the prior written consent of
the Company, directly or indirectly, in any capacity whatsoever, alone or through or in connection
with any person, solicit the employment or engagement of or otherwise entice away from the
employment or engagement of the Company or any of its affiliates, any individual who is employed or
engaged by the Company or any of its affiliates.

(b) Executive agrees that he shall not make negative statements or representations, or
otherwise communicate negatively, directly or indirectly, in writing, orally, or otherwise, or take
any action which may, directly or indirectly, disparage or be damaging to the Company, its
subsidiaries, affiliates, successors or their officers, directors, employees, business or
reputation; provided that nothing herein shall prevent Executive from responding accurately and
fully to any question, inquiry or request for information when required by law or legal process.

(c) Company shall direct its executives, and shall request in writing that the executives of
the successor to the Company, not make negative statements or representations, or otherwise
communicate negatively, directly or indirectly, in writing, orally, or otherwise, or take any
action which may, directly or indirectly, disparage or be damaging to Executive or Executive’s
reputation; provided that nothing herein shall prevent executives of the Company or the successor
to the Company from responding accurately and fully to any question, inquiry or request for
information when required by law or legal process.

Section 4.03. Material Inducement; Specific Performance. If any provision of this Agreement
or the Confidentiality Agreement is determined by a court or arbitrator of competent jurisdiction
not to be enforceable in the manner set forth herein or therein, the Company and Executive agree
that it is the intention of the parties that such provision should be enforceable to the maximum
extent possible under applicable law and that such court or arbitrator shall reform such provision
to make it enforceable in accordance with the intent of the parties. Executive agrees that a
material breach or threatened breach of this Article or the Confidentiality Agreement may cause the
Company irreparable injury for which adequate remedies are not available at law. Therefore,
Executive agrees that, if Executive materially breaches any of those covenants during or following
termination of employment, the Company may be entitled to an injunction or other equitable relief
in addition to any other relief to which the Company may become entitled.

 

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ARTICLE 5

Miscellaneous

Section 5.01. Assignment; Successors and Assigns. This Agreement shall inure to the benefit
of and be enforceable by Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees, and legatees. If Executive should die or become subject
to a permanent disability while any amount is owed but unpaid to Executive hereunder, all such
amounts, unless otherwise provided herein, shall be paid to Executive’s devisee, legatee, legal
guardian or other designee, or if there is no such designee, to Executive’s estate. Executive’s
rights hereunder shall not otherwise be assignable. This Agreement shall be binding on the
Company’s successors and assigns.

Section 5.02. Dispute Resolution. To ensure rapid and economical resolution of any and all
disputes that might arise in connection with this Agreement, Executive and the Company agree that
any and all disputes, claims, and causes of action, in law or equity, arising from or relating to
this Agreement or its enforcement, performance, breach, or interpretation, will be resolved solely
and exclusively by final, binding, and confidential arbitration, by a single arbitrator, in San
Francisco, California, and conducted by Judicial Arbitration & Mediation Services, Inc. (“JAMS”)
under its then-existing employment rules and procedures. Nothing in this section, however, is
intended to prevent either party from obtaining injunctive relief in court to prevent irreparable
harm pending the conclusion of any such arbitration. In all events, other than and to the extent
of those involving a violation by Executive of Section 4.01 and 4.02, the Company shall be
responsible for the payment of all costs of arbitration as well as both parties’ attorneys’ fees;
provided that the Company shall not be responsible for the payment of Executive’s attorneys’ fees
if Executive does not prevail on at least one material issue in dispute.

Section 5.03. Unfunded Agreement. The obligations of the Company under this Agreement
represent an unsecured, unfunded promise to pay benefits to Executive and/or Executive’s
beneficiaries, and shall not entitle Executive or such beneficiaries to a preferential claim to any
asset of the Company.

Section 5.04. Non-Exclusivity of Benefits. Unless specifically provided herein, neither the
provisions of this Agreement nor the benefits provided hereunder shall reduce any amounts otherwise
payable, or in any way diminish Executive’s rights as an employee of the Company, whether existing
now or hereafter, under any compensation and/or benefit plans (qualified or nonqualified),
programs, policies, or practices provided by the Company, for which Executive may qualify; provided
that the Severance Benefits and the Change of Control Severance Benefits shall not be duplicative
of any severance benefits under any such plans, programs, policies or practices or any other
agreement between Executive and the Company and that any amounts payable to Executive hereunder
shall be reduced by any amounts paid or notice due to Executive as required by any applicable
federal, state or local law (including without limitation the WARN Act) in connection with any
termination of Executive’s employment. Vested benefits or other amounts which Executive is
otherwise entitled to receive under any plan, policy, practice,
or program of the Company (i.e., including, but not limited to, vested benefits under any
qualified or nonqualified retirement plan, but not including severance benefits), at or subsequent
to the termination date shall be payable in accordance with such plan, policy, practice, or program
except as expressly modified by this Agreement.

 

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Section 5.05. Mitigation. In no event shall Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to Executive under any of the
provisions of this Agreement nor shall the amount of any payment or benefit hereunder be reduced by
any compensation earned by Executive as a result of employment by another employer.

Section 5.06. Entire Agreement. This Agreement represents the entire agreement between
Executive and the Company and its affiliates with respect to the matters herein, and supersedes all
prior and contemporaneous discussions, negotiations, and agreements concerning such rights
including, without limitation, the Offer Letter dated October 23, 2007.

Section 5.07. Tax Withholding. Notwithstanding anything in this Agreement to the contrary,
the Company shall be entitled to withhold from any amounts payable under this Agreement all
federal, state, city, or other taxes as the Company determines are required to be withheld.

Section 5.08. Waiver of Rights. The waiver by either party of a breach of any provision of
this Agreement shall not operate or be construed as a continuing waiver or as a consent to or
waiver of any subsequent breach hereof.

Section 5.09. Severability. In the event any provision of this Agreement shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining
parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or
invalid provision had not been included.

Section 5.10. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California without reference to principles of conflict of laws.

Section 5.11. Counterparts. This Agreement may be signed in several counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were on
the same instrument.

Section 5.12. Code Section 409A.

(a) Any lump sum payments due as Severance Benefits or Change of Control Severance Benefits
hereunder shall be paid within 60 days following termination of employment so long as the Release
has become effective during such 60-day period, but if such 60-day period during which Executive
may sign and let become effective the Release, begins in a first taxable year and ends in a second
taxable year, such payment shall only be made in the second taxable year.

 

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(b) This Agreement and the payments and benefits hereunder are intended to qualify for the
short-term deferral exception to Section 409A of the Code, and all regulations, rulings and other
guidance issued thereunder, all as amended and in effect from time to time (“Section 409A”),
described in Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent possible, and
therefore, unless otherwise expressly provided herein, all Severance Benefits or Change in Control
Severance Benefits shall be paid no later than two and one-half (2 1/2) months after the end of the
taxable year of the Executive in which the termination of employment occurs. To the extent they do
not so qualify, the Severance Benefits and Change of Control Severance Benefits are intended to
qualify for the involuntary separation pay plan exception to Section 409A described in Treasury
Regulation Section 1.409A-1(b)(9)(iii) to the maximum extent possible.

(c) To the extent Section 409A is applicable to this Agreement, this Agreement is intended to
comply with Section 409A. Without limiting the generality of the foregoing, if on the date of
termination of employment Executive is a “specified employee” within the meaning of Section 409A as
determined in accordance with the Company’s procedures for making such determination, then to the
extent required in order to comply with Section 409A (including with respect to any payments or
benefits hereunder that are determined to be in substitution for “deferred compensation” subject to
Section 409A), amounts that would otherwise be payable under this Agreement during the six-month
period immediately following the termination date shall instead be paid on the earlier of (i) the
first business day after the date that is six months following the termination date or (ii)
Executive’s death. All references herein to “termination date” or “termination of employment”
shall mean “separation from service” as an employee within the meaning of Section 409A.

(d) It is intended that each installment of payments provided hereunder constitute separate
“payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). To the extent that any
provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will
be read in such a manner so that all payments hereunder comply with Section 409A. Except as
otherwise expressly provided herein, to the extent any expense reimbursement or the provision of
any in-kind benefit under this Agreement is determined to be subject to Section 409A, the amount of
any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one
calendar year shall not affect the expenses eligible for reimbursement in any other taxable year
(except for any lifetime or other aggregate limitation applicable to medical expenses); in no event
shall any expenses be reimbursed after the last day of the calendar year following the calendar
year in which Executive incurred such expenses; and in no event shall any right to reimbursement or
the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.
The Company makes no representation or warranty and shall have no liability to the Executive or any
other person if any provisions of this Agreement are determined to constitute deferred compensation
subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of,
such Section.

 

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement, to be
effective as of the date and year first written above.

	 	 	 	 	 
	 	SMART MODULAR TECHNOLOGIES (WWH), INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Iain MacKenzie 	 
	 	 	Title:  	President and CEO 	 
	 
	 	EXECUTIVE:
 	 
	 	 
	 
	 
	 	Date: 	 
	 	 	 
	 

 

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Exhibit A — Form of Release

Reference is made in this Release (“Release”) to the terms set forth in the Severance and
Change of Control Agreement dated                      (the “Agreement”) between SMART Modular Technologies (WWH),
Inc. (together with its successors and assigns, the “Company”) and the undersigned                     
(“Executive”).

1. Release. In consideration for the benefits outlined in the Agreement (the “Severance
Benefits”), to which I am not otherwise entitled, I hereby generally and completely release the
Company and its affiliated entities (collectively “Company Entities”) and their directors,
officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent
and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way related to events, acts,
conduct or omissions occurring prior to the time I sign this Release. This general release
includes, but is not limited to: (1) all claims arising out of or in any way related to my
employment with the Company or the termination of that employment; (2) all claims related to my
compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay,
expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other
ownership interests in the Company; (3) all claims for breach of contract, wrongful termination or
breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including
claims for fraud, defamation, emotional distress, and discharge in violation of public policy; (5)
all federal, state, and local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964
(as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination
in Employment Act of 1967 (as amended) (“ADEA”), Sections 1981 through 1988 of Title 42 of the
United States Code, the California Fair Employment and Housing Act (as amended), Calif. Gov’t Code
 § 12900 et seq., California Business and Professions Code § 17200 or any other provisions of the
California unfair trade or business practices laws, the California Family Rights Act, Calif. Gov’t
Code § 12945.2, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the
California Labor Code beginning at § 3200, any provision of the California Constitution, any
provision of the California Labor Code that may lawfully be released, the Employee Retirement
Income Security Act of 1974 (“ERISA”) (except for any vested benefits under any tax qualified
benefit plan), the Immigration Reform and Control Act, the Workers Adjustment and Retraining
Notification Act, the Fair Credit Reporting Act; and (6) any other federal, state or local law,
rule, regulation, or ordinance; (7) any public policy, contract, tort, or common law; and (8) any
basis for recovering costs, fees, or other expenses including attorneys’ fees incurred in these
matters. This Release does not apply to (x) claims which cannot be released as a matter of law,
(y) any right I may have to enforce the Agreement, or (z) my eligibility for indemnification and
similar matters in accordance with applicable laws, the articles, charter and bylaws of the Company
or any indemnification agreement I have with the Company.

 

A-1

 

2. ADEA Waiver. I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I have under the ADEA and that the consideration given for the waiver and release is in
addition to anything of value to which I was already entitled. I further acknowledge that I have
been advised by this writing, as required by the ADEA, that:

(a) my waiver and release specified in this paragraph do not apply to any rights or
claims that arise after the date I sign this Release;

(b) I have the right to consult with an attorney prior to signing this Release;

(c) I have twenty-one (21) days to consider this Release (although I may choose
voluntarily to sign this Release earlier);

(d) I have seven (7) days after I sign this Release to revoke the Release; and

(e) this Release will not be effective until the date on which the revocation period
has expired, which will be the eighth day after I sign this Release, assuming I have
returned it to the Company by such date.

3. Waiver of Unknown Claims. In granting the general release herein, I acknowledge that I have
read and understand California Civil Code section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

I expressly waive and relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect.

This Release, together with the Agreement, constitutes the entire understanding of the parties
on the subjects covered.

	 	 	 	 	 
	 

	 	EXECUTIVE:	 	 
	 
	 	 	 	 
	 

	 	 

[NAME]
	 	 
	 

	 	Dated:	 	 
	 

	 	 

	 	 

 

A-2exv4w1

Exhibit 4.1

REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of December
30, 2010, by and between McMoRan Exploration Co., a Delaware corporation (“McMoRan”), and Plains
Exploration & Production Company, a Delaware corporation (“PXP”). McMoRan and PXP are sometimes
referred to collectively as the “Parties” and individually as a “Party.”

RECITALS:

     WHEREAS, McMoRan, McMoRan Oil & Gas LLC, a Delaware limited liability company, McMoRan GOM,
LLC, a Delaware limited liability company, McMoRan Offshore LLC, a Delaware limited liability
company, PXP, PXP Gulf Properties LLC, a Delaware limited liability company (“PXP Gulf”), and PXP
Offshore LLC, a Delaware limited liability company (“PXP Offshore”), have entered into that certain
Agreement and Plan of Merger (the “Merger Agreement”), dated as of September 19, 2010, pursuant to
which McMoRan will acquire PXP Gulf and PXP Offshore in exchange for cash and shares of common
stock, par value $0.01 per share, of McMoRan (the “McMoRan Common Stock”); and

     WHEREAS, to induce PXP to enter into the Merger Agreement and to consummate the transactions
contemplated thereby, PXP has required that McMoRan agree, and McMoRan has agreed, to enter into
this Agreement and abide by the covenants and obligations with respect to the Registrable
Securities as set forth herein; and

     NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations,
warranties, covenants, conditions and agreements contained herein, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

ARTICLE 1

DEFINITIONS

     Section 1.1 Definitions. Capitalized terms used herein without definition shall have
the meanings given to them in the Merger Agreement. The terms set forth below are used herein as
so defined:

     “Agreement” has the meaning specified in the introductory paragraph of this Agreement.

     “Effectiveness Period” has the meaning specified in Section 2.1(b) of this Agreement.

     “Holder” means the record holder of any Registrable Securities; provided, that no such record
holder shall be deemed to be a “Holder” if the rights under Article II hereof have not been
transferred or assigned to such record holder in accordance with Section 2.11.

     “Included Registrable Securities” has the meaning specified in Section 2.2(a) of this
Agreement.

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     “Losses” has the meaning specified in Section 2.9(a) of this Agreement.

     “Managing Underwriter” means, with respect to any Underwritten Offering, the book-running lead
manager(s) of such Underwritten Offering.

     “McMoRan” has the meaning specified in the introductory paragraph of this Agreement.

     “McMoRan Common Stock” has the meaning specified in the recitals of this Agreement.

     “Merger Agreement” has the meaning specified in the recitals of this Agreement.

     “NYSE” means The New York Stock Exchange, Inc.

     “Parity Securities” has the meaning specified in Section 2.2(b) of this Agreement.

     “PXP” has the meaning specified in the introductory paragraph of this Agreement.

     “PXP Gulf” shall have the meaning specified in the Recitals of this Agreement.

     “PXP Offshore” shall have the meaning specified in the Recitals of this Agreement.

     “Registrable Securities” means the McMoRan Common Stock to be acquired by PXP pursuant to the
Merger Agreement and any additional securities issued with respect to such shares of McMoRan Common
Stock.

     “Registration Expenses” has the meaning specified in Section 2.8(b) of this Agreement.

     “Registration Statement” means any registration statement of McMoRan filed under the
Securities Act that covers the resale of any of the Registrable Securities pursuant to the
provisions of this Agreement, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by reference in such
Registration Statement.

     “Selling Expenses” has the meaning specified in Section 2.8(b) of this Agreement.

     “Selling Holder” means a Holder who is selling Registrable Securities pursuant to a
registration statement.

     “Selling Holder Indemnified Persons” has the meaning specified therefore in Section
2.9(a) of this Agreement.

     “Underwritten Offering” means an offering (including an offering pursuant to a Registration
Statement) in which shares of McMoRan Common Stock are sold to an underwriter on a firm commitment
basis for reoffering to the public or an offering that is a “bought deal” with one or more
investment banks.

     Section 1.2 Registrable Securities. Any Registrable Security will cease to be a
Registrable Security upon the earliest of (a) when a registration statement covering such
Registrable Security becomes or has been declared effective by the SEC and such Registrable

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Security has been sold or disposed of pursuant to such effective registration statement; (b) when
such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar
provision then in effect) under the Securities Act or such Registrable Security is eligible to be
disposed of by the Holder thereof under Rule 144 without restriction as to volume; (c) when such
Registrable Security is held by McMoRan or one of its subsidiaries; and (d) when such Registrable
Security has been sold in a private transaction in which the transferor’s rights under this
Agreement are not assigned to the transferee of such securities pursuant to Section 2.11
hereof.

ARTICLE 2

REGISTRATION RIGHTS

     Section 2.1 Registration.

          (a) Not later than 60 days after the Closing Date, McMoRan shall file with the SEC an
automatic shelf Registration Statement (or, if McMoRan is not eligible to use an automatic shelf
Registration Statement, a Registration Statement on Form S-3 or such other form as is then
available to McMoRan to effect a registration for resale of the Registrable Securities) covering
the resale of the Registrable Securities. Any Registration Statement shall provide for the resale
of Registrable Securities pursuant to any method or combination of methods legally available to,
and requested by, the Holder of any Registrable Securities covered by such Registration Statement.
If such Registration Statement is not automatically effective upon filing, then McMoRan shall use
its commercially reasonable efforts to cause such Registration Statement to be declared effective
not later than 240 days after the Closing Date.

          (b) McMoRan shall use its commercially reasonable efforts to cause a Registration Statement
filed pursuant to this Section 2.1 to be effective, supplemented, amended and replaced to
the extent necessary to ensure that it is available for the resale of all Registrable Securities by
the Holders until the earliest date on which any of the following occurs: (i) all Registrable
Securities covered by such Registration Statement have ceased to be Registrable Securities and (ii)
there are no longer any Registrable Securities outstanding (the “Effectiveness Period”). Subject
to Section 2.3, upon the occurrence of any event that would cause the Registration Statement or the
Prospectus contained therein (i) to contain an untrue statement of material fact or omit to state
any material fact necessary to make the statements therein not misleading or (ii) not to be
effective and usable for the resale of all or part of the Registrable Securities by the Holders,
McMoRan shall promptly file an appropriate amendment to the Registration Statement curing such
defect, and, if SEC review is required, use its commercially reasonable efforts to cause such
amendment to be declared effective as soon as practicable. McMoRan shall prepare and file with the
SEC such amendments and post-effective amendments to the Registration Statement as may be necessary
to keep such Registration Statement effective during the Effective Period; cause the Prospectus to
be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act,
and to comply fully with the rules and regulations under the Securities Act in a timely manner; and
comply with the provisions of the Securities Act with respect to the disposition of all securities
covered by the Registration Statement during the Effectiveness Period.

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          (c) Subject to Section 2.3, a Registration Statement when effective will comply as to form in
all material respects with all applicable requirements of the Securities Act and the Exchange Act
and will not contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading (and, in
the case of any prospectus contained in such Registration Statement, in the light of the
circumstances under which a statement is made). As soon as practicable following the date that a
Registration Statement becomes effective, but in any event within two (2) Business Days of such
date, McMoRan shall provide PXP with written notice of the effectiveness of such Registration
Statement.

     Section 2.2 Piggyback Rights.

          (a) Participation. If at any time McMoRan proposes to file (i) a shelf registration
statement other than a Registration Statement contemplated by Section 2.1, (ii) a
prospectus supplement to an effective shelf registration statement, other than a Registration
Statement contemplated by Section 2.1, and Holders may be included without the filing of a
post-effective amendment thereto that requires McMoRan to request acceleration of the same from the
SEC, or (iii) a registration statement, other than a shelf registration statement, in any case, for
the sale of McMoRan Common Stock in an Underwritten Offering for its own account and/or another
Person, then as soon as practicable following the engagement of counsel by McMoRan to prepare the
documents to be used in connection with an Underwritten Offering, McMoRan shall give written notice
of such proposed Underwritten Offering to each Holder holding outstanding Registrable Securities
and such notice shall offer such Holder the opportunity to include in such Underwritten Offering
such number of Registrable Securities (the “Included Registrable Securities”) as each such Holder
may request in writing; provided, however, that if McMoRan has been advised by the Managing
Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders
will have an adverse effect on the price, timing (other than by reason of the notice periods set
forth herein) or distribution of the McMoRan Common Stock in the Underwritten Offering, then (a)
McMoRan shall not be required to offer such opportunity to the Holders, in which case McMoRan shall
provide the Holders written advisement of their exclusion (which notice need not include any
explanation of the reasons for the exclusion) from the Underwritten Offering no later than 24 hours
after the pricing of the Underwritten Offering, or (b) if any Registrable Securities can be
included in the Underwritten Offering in the opinion of the Managing Underwriter, then the amount
of Registrable Securities to be offered for the accounts of Holders shall be determined based on
the provisions of Section 2.2(b), in which case McMoRan shall provide the Holders written
advisement of their reduced participation (which notice need not include any explanation of the
reasons for the reduced participation) in the Underwritten Offering no later than 24 hours after
the pricing of the Underwritten Offering. Any notice required to be provided in this Section
2.2(a) to Holders shall be provided on a Business Day pursuant to Section 3.1 hereof
and receipt of such notice shall be confirmed by the Holder (provided that the failure of the Holder to
confirm receipt shall not affect the validity or timing of delivery of such notice). Each such
Holder shall have two (2) Business Days (or one (1) Business Day in connection with any overnight
or bought Underwritten Offering) after written notice has been delivered to request in writing the
inclusion of Registrable Securities in the Underwritten Offering. If no written request for
inclusion from a Holder is received within the specified time, each such Holder shall have no
further right to participate in such Underwritten Offering. If, at any time after giving

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written notice of its intention to undertake an Underwritten Offering and prior to the closing of such
Underwritten Offering, McMoRan shall determine for any reason not to undertake or to delay such
Underwritten Offering, McMoRan may, at its election, give written notice of such determination to
the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten
Offering, shall be relieved of its obligation to sell any Included Registrable Securities in
connection with such terminated Underwritten Offering, and (y) in the case of a determination to
delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable
Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall
have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s
Registrable Securities in such Underwritten Offering by giving written notice to McMoRan of such
withdrawal at least one Business Day prior to the time of pricing of such Underwritten Offering.

          (b) Priority. If the Managing Underwriter or Underwriters of any proposed
Underwritten Offering of McMoRan Common Stock included in an Underwritten Offering involving
Included Registrable Securities advises McMoRan that the total amount of Registrable Securities
that the Selling Holders and any other Persons intend to include in such offering exceeds the
number that can be sold in such offering without being likely to have an adverse effect on the
price, timing (other than by reason of the notice periods set forth herein) or distribution of the
McMoRan Common Stock offered, then the McMoRan Common Stock to be included in such Underwritten
Offering shall include the number of Registrable Securities that such Managing Underwriter or
Underwriters advises McMoRan can be sold without having such adverse effect, with such number to be
allocated (i) first, to McMoRan and (ii) second, pro rata among the Selling Holders who have
requested participation in such Underwritten Offering and any other holder of securities of McMoRan
having rights of registration on parity with the Registrable Securities (the “Parity Securities”).
The pro rata allocations for each Selling Holder who have requested participation in such
Underwritten Offering shall be the product of (a) the aggregate number of Registrable Securities
proposed to be sold by all Selling Holders in such Underwritten Offering multiplied by (b) the
fraction derived by dividing (x) the number of Registrable Securities owned on the Closing Date by
such Selling Holder by (y) the aggregate number of Registrable Securities owned on the Closing Date
by all Selling Holders and holders of Parity Securities participating in the Underwritten Offering.

          (c) Termination of Piggyback Registration Rights. Each Holder’s rights under
Section 2.2 shall terminate upon such Holder ceasing to hold at least 1,000,000 of the then
outstanding Registrable Securities.

     Section 2.3 Delay Rights.

     Notwithstanding anything to the contrary contained herein, McMoRan may, upon written notice to
any Selling Holder whose Registrable Securities are included in a Registration Statement or other
registration statement contemplated by this Agreement, suspend such Selling Holder’s use of any
prospectus which is a part of a Registration Statement or other registration statement (in which
event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to such
Registration Statement or other registration statement but may settle any previously made sales of
Registrable Securities) if (i) McMoRan is pursuing an acquisition, merger, reorganization,
disposition or other similar transaction and McMoRan determines in

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good faith that McMoRan’s ability to pursue or consummate such a transaction would be materially adversely affected by any
required disclosure of such transaction in a Registration Statement or other registration
statement; (ii) McMoRan has experienced some other material non-public event the disclosure of
which at such time, in the good faith judgment of the Board of Directors of McMoRan, would
materially and adversely affect McMoRan; or (iii) McMoRan would be required to prepare and file any
financial statements (other than those it customarily prepares or before it customarily files such
financial statements); provided, however, that in no event shall the Selling Holders be suspended
from selling Registrable Securities pursuant to a Registration Statement or other registration
statement for a period that exceeds an aggregate of 45 days in any 180-day period or 90 days in any
365-day period, in each case, exclusive of days covered by any lock-up agreement executed by PXP in
connection with any Underwritten Offering. Upon disclosure of such information or the termination
of the condition described above, McMoRan shall provide prompt written notice to the Selling
Holders whose Registrable Securities are included in a Registration Statement, and shall promptly
terminate any suspension of sales it has put into effect and shall take such other reasonable
actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

     Section 2.4 Underwritten Offerings. In the event that one or more Holders elects to
dispose of at least 1,000,000 Registrable Securities under a Registration Statement pursuant to an
Underwritten Offering, McMoRan shall, upon request by such Holders, retain underwriters in order to
permit such Holders to effect such sale though an Underwritten Offering; provided, that McMoRan
shall not be required to effect more than three Underwritten Offerings pursuant to this Section
2.4 and the Holders shall be limited to one such request in any six-month period. In
connection with any Underwritten Offering under this Agreement, the holders of a majority of the
Registrable Securities being disposed of pursuant to the Underwritten Offering shall be entitled to
select the Managing Underwriter or Underwriters for such Underwritten Offering, subject to the
consent of McMoRan, which shall not be unreasonably withheld, delayed or conditioned. In
connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder
participates, each Selling Holder and McMoRan shall be obligated to enter into an underwriting
agreement that contains such representations, covenants, indemnities and other rights and
obligations as are customary in underwriting agreements for firm commitment offerings of
securities. No Selling Holder may participate in such Underwritten Offering unless such Selling
Holder agrees to sell its Registrable Securities on the basis provided in such underwriting
agreement and completes and executes all questionnaires, powers of attorney and other documents
reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at
its option, require that any or all of the representations and warranties by, and the
other agreements on the part of, McMoRan to and for the benefit of such underwriters also be
made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement also be conditions precedent
to its obligations. No Selling Holder shall be required to make any representations or warranties
to or agreements with McMoRan or the underwriters other than representations, warranties or
agreements regarding the identity of such Selling Holder, its authority to enter into such
underwriting agreement and to sell, and its ownership of, the securities being registered on its
behalf, its intended method of distribution and any other representation required by Law. If any
Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to
withdraw therefrom by notice to McMoRan and the Managing Underwriter; provided, however, that such
withdrawal must be made at least one

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Business Day prior to the time of pricing of such Underwritten
Offering. No such withdrawal or abandonment shall affect McMoRan’s obligation to pay Registration
Expenses.

     Section 2.5 Sale Procedures. In connection with its obligations under this
Article 2, McMoRan will, as expeditiously as possible:

          (a) subject to Section 2.3, prepare and file with the SEC such amendments and supplements to,
and replacements of, a Registration Statement and the prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for the Effectiveness Period and as
may be necessary to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration Statement;

          (b) if a prospectus supplement will be used in connection with the marketing of an
Underwritten Offering from a Registration Statement and the Managing Underwriter at any time shall
notify McMoRan in writing that, in the sole judgment of such Managing Underwriter, inclusion of
detailed information to be used in such prospectus supplement is of material importance to the
success of the Underwritten Offering of such Registrable Securities, McMoRan shall use its
commercially reasonable efforts to include such information in such prospectus supplement;

          (c) furnish to each Selling Holder (i) before filing a Registration Statement or any other
registration statement contemplated by this Agreement or any supplement or amendment thereto,
copies of reasonably complete drafts of all such documents proposed to be filed (including
exhibits), and provide each such Selling Holder the opportunity to object to any information
pertaining to such Selling Holder and its plan of distribution that is contained therein and make
the corrections reasonably requested by such Selling Holder with respect to such information prior
to filing such Registration Statement or such other registration statement or supplement or
amendment thereto, and (ii) such number of copies of such Registration Statement or such other
registration statement and the prospectus included therein and any supplements and amendments
thereto as such Selling Holder may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities covered by such Registration Statement or other
registration statement;

          (d) if applicable, use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by a Registration Statement or any other registration statement
contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the
Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall
reasonably request; provided, however, that McMoRan will not be required to qualify generally to
transact business in any jurisdiction where it is not then required to so qualify or to take any
action that would subject it to general service of process in any such jurisdiction where it is not
then so subject;

          (e) promptly notify each Selling Holder, at any time when a prospectus relating thereto is
required to be delivered by any of them under the Securities Act, of (i) the filing of a
Registration Statement or any other registration statement contemplated by this Agreement or any
prospectus or prospectus supplement to be used in connection therewith, or any amendment or
supplement thereto, and, with respect to such Registration Statement or any

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other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the
receipt of any written comments from the SEC with respect to any filing referred to in clause
(i) of this Section 2.5(e) and any written request by the SEC for amendments or
supplements to a Registration Statement or any other registration statement or any prospectus or
prospectus supplement thereto;

          (f) immediately notify each Selling Holder, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of (i) the prospectus or prospectus supplement
contained in a Registration Statement or any other registration statement contemplated by this
Agreement, as then in effect, including an untrue statement of a material fact or omitting to state
any material fact required to be stated therein or necessary to make the statements therein not
misleading (in the case of any prospectus contained therein, in the light of the circumstances
under which a statement is made); (ii) the issuance or threat of issuance by the SEC of any stop
order suspending the effectiveness of a Registration Statement or any other registration statement
contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the
receipt by McMoRan of any notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable securities or blue sky laws of any
jurisdiction. Subject to Section 2.3, following the provision of such notice, McMoRan
agrees to use commercially reasonable efforts to, as promptly as practicable, amend or supplement
the prospectus or prospectus supplement or take other appropriate action so that the prospectus or
prospectus supplement does not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and to take such other commercially
reasonable action as is necessary to remove a stop order, suspension, threat thereof or proceedings
related thereto;

          (g) subject to appropriate confidentiality obligations, furnish to each Selling Holder copies
of any and all transmittal letters or other correspondence with the SEC or any other governmental
agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign
securities exchange) relating to such offering of Registrable Securities;

          (h) in the case of an Underwritten Offering, use commercially reasonable efforts to furnish
upon request, (i) an opinion of counsel for McMoRan dated the date of the
closing under the underwriting agreement, and (ii) a “cold comfort” letter, dated the pricing
date of such Underwritten Offering and a letter of like kind dated the date of the closing under
the underwriting agreement, in each case, signed by the independent public accountants who have
certified McMoRan’s financial statements included or incorporated by reference into the applicable
registration statement, and each of the opinion and the “cold comfort” letter shall be in customary
form and covering substantially the same matters with respect to such registration statement (and
the prospectus and any prospectus supplement included therein) as have been customarily covered in
opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in
Underwritten Offerings of securities by McMoRan;

          (i) otherwise use its commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

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          (j) make available to the appropriate representatives of the Managing Underwriter and Selling
Holders access to such information and McMoRan personnel as is reasonable and customary to enable
such parties to establish a due diligence defense under the Securities Act, provided that McMoRan
need not disclose any non-public information to any such representative unless and until such
representative has entered into a confidentiality agreement with McMoRan reasonably satisfactory to
McMoRan;

          (k) cause all such Registrable Securities registered pursuant to this Agreement to be listed
on each securities exchange or nationally recognized quotation system on which similar securities
issued by McMoRan are then listed;

          (l) use its commercially reasonable efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities as may be necessary
by virtue of the business and operations of McMoRan to enable the Selling Holders to consummate the
disposition of such Registrable Securities;

          (m) in connection with any Underwritten Offering provided for hereunder, participate in “road
shows” and other marketing efforts as reasonably requested by the Selling Holders, provided that
McMoRan shall not be required to participate in more than two road shows or similar marketing
efforts in any 12-month period;

          (n) provide a transfer agent and registrar for all Registrable Securities covered by such
registration statement not later than the effective date of such registration statement; and

          (o) enter into customary agreements and take such other actions as are reasonably requested by
the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition
of such Registrable Securities.

          Each Selling Holder, upon receipt of notice from McMoRan of the happening of any event of the
kind described in subsection (e) of this Section 2.5, shall forthwith discontinue
offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement
until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (e) of this Section 2.5 or until it is advised in
writing by McMoRan that the use of the prospectus may be resumed and has received copies of any
additional or supplemental filings incorporated by reference in the prospectus, and, if so directed
by McMoRan, such Selling Holder will, or will request the managing underwriter or underwriters, if
any, to deliver to McMoRan (at McMoRan’s expense) all copies in their possession or control, other
than permanent file copies then in such Selling Holder’s possession, of the prospectus covering
such Registrable Securities current at the time of receipt of such notice.

          Section 2.6 Cooperation by Holders. McMoRan shall have no obligation to include
Registrable Securities of a Holder in a Registration Statement or in an Underwritten Offering
pursuant to Section 2.2(a) who has failed to timely furnish such information concerning
such Holder that McMoRan determines, after consultation with its counsel, is reasonably required in
order for the registration statement or prospectus supplement, as applicable, to comply with the
Securities Act.

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     Section 2.7 Restrictions on Public Sale by Holders of Registrable Securities. For so
long as Registrable Securities in the aggregate represent more than 10% of the outstanding McMoRan
Common Stock of McMoRan, each Holder of Registrable Securities agrees to enter into a customary
letter agreement with underwriters providing such Holder will not effect any public sale or
distribution of the Registrable Securities during the 90 calendar day period beginning on the date
of a prospectus or prospectus supplement filed with the SEC with respect to the pricing of an
Underwritten Offering, provided that (i) the duration of the foregoing restrictions shall be no
longer than the duration of the shortest restriction generally imposed by the underwriters on
McMoRan or the officers, directors or any other stockholder of McMoRan on whom a restriction is
imposed and (ii) the restrictions set forth in this Section 2.7(b) shall not apply to any
Registrable Securities that are included in such Underwritten Offering by such Holder.
Notwithstanding the foregoing, nothing in this Section 2.7(b) shall restrict the ability of
any Holder from disposing of its Registrable Securities pursuant to a Rule 10b5-1 plan.

     Section 2.8 Expenses.

          (a) Expenses. McMoRan will pay all Registration Expenses, including, in the case of
an Underwritten Offering, whether or not any sale is made pursuant to such Underwritten Offering.
Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any
sale of its Registrable Securities hereunder, and McMoRan shall not be responsible for any Selling
Expenses. In addition, except as otherwise provided in Section 2.8(b) and Section 2.9
hereof, McMoRan shall not be responsible for legal fees incurred by Holders in connection with the
exercise of such Holders’ rights hereunder.

          (b) Certain Definitions. “Registration Expenses” means all reasonable expenses
incident to McMoRan’s performance under or compliance with this Agreement to effect the
registration of Registrable Securities on a Registration Statement pursuant to Section 2.1
or an Underwritten Offering covered under this Agreement, and the disposition of such
Registrable Securities, including, without limitation, all registration, filing, securities
exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses
of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority,
Inc., fees of transfer agents and registrars, all word processing, duplicating and printing
expenses, any transfer taxes and the fees and disbursements of counsel and independent public
accountants for McMoRan, including the expenses of any special audits or “cold comfort” letters
required by or incident to such performance and compliance. “Selling Expenses” means all
underwriting fees, discounts and selling commissions or similar fees or arrangements and transfer
taxes allocable to the sale of the Registrable Securities.

     Section 2.9 Indemnification.

          (a) By McMoRan. In the event of a registration of any Registrable Securities under
the Securities Act pursuant to this Agreement, McMoRan will indemnify and hold harmless each
Selling Holder thereunder, its directors, officers, employees and agents and each Person, if any,
who controls such Selling Holder within the meaning of the Securities Act and the Exchange Act, and
its directors, officers, employees or agents (collectively, the “Selling Holder Indemnified
Persons”), against any losses, claims, damages, expenses or liabilities (including reasonable
attorneys’ fees and expenses) (collectively, “Losses”), joint or several, to which such

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Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of
any material fact (in the case of any prospectus, in light of the circumstances under which such
statement is made) contained in a Registration Statement or any other registration statement
contemplated by this Agreement, any preliminary prospectus, prospectus supplement, free writing
prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of a prospectus, in
light of the circumstances under which they were made) not misleading, and will reimburse each such
Selling Holder Indemnified Person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Loss or actions or proceedings; provided,
however, that McMoRan will not be liable in any such case if and to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by such Selling Holder
Indemnified Person in writing specifically for use in a Registration Statement or such other
registration statement, preliminary prospectus, free writing prospectus or prospectus supplement,
as applicable, it being understood that a Selling Holder will only be required to furnish
information regarding its legal name, address, the number of securities being registered on its
behalf and such other information as may be required by Law. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such Selling Holder
Indemnified Person, and shall survive the transfer of such securities by such Selling Holder.

          (b) By Each Selling Holder. Each Selling Holder agrees severally and not jointly to
indemnify and hold harmless McMoRan, its directors, officers, employees and agents
and each Person, if any, who controls McMoRan within the meaning of the Securities Act or of
the Exchange Act, and its directors, officers, employees and agents, to the same extent as the
foregoing indemnity from McMoRan to the Selling Holders, but only with respect to information
regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly
for inclusion in a Registration Statement or any other registration statement contemplated by this
Agreement, any preliminary prospectus, prospectus supplement, free writing prospectus or final
prospectus contained therein, or any amendment or supplement thereof; provided, however, that the
liability of each Selling Holder shall not be greater in amount than the dollar amount of the
proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the
Registrable Securities giving rise to such indemnification.

          (c) Notice. Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission so to notify the indemnifying party shall not relieve it from any liability that
it may have to any indemnified party other than under this Section 2.9 except to the extent
that the indemnifying party is prejudiced by such omission. In any action brought against any
indemnified party, it shall notify the indemnifying party of the commencement thereof. The
indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume
and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party
and, after notice from the indemnifying party to such indemnified party of its election so to

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assume and undertake the defense thereof, the indemnifying party shall not be liable to such
indemnified party under this Section 2.9 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; provided, however, that, (i) if the
indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the
indemnified party or (ii) if the defendants in any such action include both the indemnified party
and the indemnifying party and counsel to the indemnified party shall have concluded that there may
be reasonable defenses available to the indemnified party that are different from or additional to
those available to the indemnifying party, or if the interests of the indemnified party reasonably
may be deemed to conflict with the interests of the indemnifying party, then the indemnified party
shall have the right to select a separate counsel, with the reasonable out-of-pocket expenses and
fees of such separate counsel and other reasonable out-of-pocket expenses related to such
participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other
provision of this Agreement, no indemnified party shall settle any action brought against it with
respect to which such indemnified party is entitled to indemnification hereunder without the
consent of the indemnifying party, unless the settlement thereof includes a complete release from
all liability of, the indemnifying party.

          (d) Contribution. If the indemnification provided for in this Section 2.9 is
held by a court or government agency of competent jurisdiction to be unavailable to any indemnified
party, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result of such Loss in such
proportion as is appropriate to reflect the relative fault of the indemnifying party on the one
hand and of such indemnified party on the other in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall such Selling Holder be required to
contribute an aggregate amount in excess of the lesser of (A) the amount which such Selling Holder
would have been obligated to pay under Section 2.9(b) if such indemnity was available to
the indemnified party and (B) the dollar amount of proceeds (net of Selling Expenses) received by
such Selling Holder from the sale of Registrable Securities giving rise to such indemnification.
The relative fault of the indemnifying party on the one hand and the indemnified party on the other
shall be determined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a material fact has been
made by, or relates to, information supplied by such party, and the Parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Parties agree that it would not be just and equitable if contributions pursuant to this
paragraph were to be determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to herein. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of this paragraph
shall be deemed to include any legal and other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any Loss that is the subject of this paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who is not guilty of such
fraudulent misrepresentation.

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          (e) Other Indemnification. The provisions of this Section 2.9 shall be in
addition to any other rights to indemnification or contribution that an indemnified party may have
pursuant to law, equity, contract or otherwise.

     Section 2.10 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC that may permit the sale of the Registrable Securities to
the public without registration, McMoRan agrees to use its commercially reasonable efforts to:

          (a) make and keep public information regarding McMoRan available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times from and after the date
hereof;

          (b) file with the SEC in a timely manner all reports and other documents required of McMoRan
under the Securities Act and the Exchange Act at all times from and after the date hereof; and

          (c) so long as a Holder owns any Registrable Securities, furnish, unless otherwise available
via EDGAR, to such Holder forthwith a copy of the most recent annual or quarterly report of
McMoRan, and such other reports and documents so filed as such Holder may reasonably request in
availing itself of any rule or regulation of the SEC allowing such Holder to sell any such
securities without registration.

     Section 2.11 Transfer or Assignment of Registration Rights. The rights under this Article 2 may be not transferred or assigned by PXP except to
wholly owned subsidiaries of PXP and provided that (a) McMoRan is given written notice prior to any
said transfer or assignment, stating the name and address of each such transferee and identifying
the securities with respect to which such registration rights are being transferred or assigned,
and (b) each such transferee assumes in writing responsibility for its portion of the obligations
of PXP under this Agreement.

ARTICLE 3

MISCELLANEOUS

     Section 3.1 Communications. All notices that are required or may be given pursuant to this
Agreement shall be sufficient in all respects if given in writing. Any such notice shall be deemed
given (i) when made, if made by hand delivery, and upon confirmation of receipt, if made by
facsimile, (ii) one Business Day after being deposited with a next-day courier, postage prepaid, or
(iii) three Business Days after being sent certified or registered mail, return receipt requested,
postage prepaid, in each case addressed as follows:

     If to PXP, to:

Plains Exploration & Production Company

700 Milam Street, Suite 3100

Houston, Texas 77002

Fax: (713) 579-6231

Attention: General Counsel

     With a copy to (which copy shall not constitute notice):

13

 

Latham & Watkins LLP

717 Texas Avenue, Suite 1600

Houston, Texas 77002

Fax: (713) 546-5401

Attention: Michael E. Dillard

Sean T. Wheeler

     If to McMoRan, to:

McMoRan Exploration Co.

1615 Poydras Street

New Orleans, Louisiana 70112

Fax: 504-585-3513

Attention: John Amato

     With a copy to (which copy shall not constitute notice):

Baker Botts LLP

One Shell Plaza

910 Louisiana Street

Houston, Texas 77002

Fax: (713) 229-1522

Attention: J. David Kirkland, Jr.

M. Breen Haire

     If to an assignee of PXP, to such Holder at the address provided pursuant to Section
2.11 above.

     Either Party may change its address for notice by notice to the other in the manner set forth
above. All notices shall be deemed to have been duly given at the time of receipt by the Party to
which such notice is addressed.

     Section 3.2 Successor and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and permitted assigns of each of the Parties, including subsequent
Holders of Registrable Securities to the extent permitted herein.

     Section 3.3 Recapitalization, Exchanges, Etc. Affecting the McMoRan Common Stock. The
provisions of this Agreement shall apply to the full extent set forth herein with respect to any
and all securities of McMoRan or any successor or assign of McMoRan (whether by merger,
consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in
substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations,
stock splits, recapitalizations, pro rata distributions of securities and the like occurring after
the date of this Agreement.

     Section 3.4 Aggregation of Registrable Securities. All Registrable Securities held
or acquired by Persons who are Affiliates of one another shall be aggregated together for the
purpose of determining the availability of any rights and applicability of any obligations under
this Agreement.

14

 

     Section 3.5 Specific Performance. Damages in the event of breach of this Agreement by
a Party may be difficult, if not impossible, to ascertain, and it is therefore agreed that each
such Person, in addition to and without limiting any other remedy or right it may have, will have
the right to an injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of
the Parties hereto hereby waives any and all defenses it may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other equitable relief. The
existence of this right will not preclude any such Person from pursuing any other rights and remedies
at law or in equity that such Person may have.

     Section 3.6 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original instrument, but all such counterparts together shall constitute but one
agreement. Facsimiles of signatures or signatures delivered in portable document format (.pdf)
will be deemed to be originals.

     Section 3.7 Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

     Section 3.8 Governing Law.

          (a) This Agreement and the legal relations between the Parties shall be governed by and
construed in accordance with the Laws of the State of Delaware, United States of America without
regard to principles of conflicts of laws that would direct the application of the Laws of another
jurisdiction.

          (b) Any action brought in connection with this Agreement shall be brought in the federal or
state courts located in the City of Wilmington, Delaware. The Parties hereto hereby (i)
irrevocably consent to the personal jurisdiction and venue of such courts, and (ii) waive any claim
(by way of motion, as a defense or otherwise) of improper venue, that such parties are not subject
personally to the jurisdiction of such court, that such courts are an inconvenient forum or that
this Agreement or the subject matter may not be enforced in or by such court.

     Section 3.9 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining provisions
hereof or affecting or impairing the validity or enforceability of such provision in any other
jurisdiction.

     Section 3.10 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties pertaining to the subject matter hereof, and supersede all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the Parties pertaining to
the subject matter hereof.

     Section 3.11 Amendment. This Agreement may be amended only by means of a written amendment signed by McMoRan and
the Holders of a majority of the then outstanding Registrable Securities; provided, however, that
no such amendment shall materially and adversely affect the rights of any Holder hereunder without
the consent of such Holder.

15

 

     Section 3.12 No Presumption. If any claim is made by a Party relating to any
conflict, omission, or ambiguity in this Agreement, no presumption or burden of proof or persuasion
shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a
particular Party or its counsel. Each Party has been represented by its own counsel in connection
with the negotiation and preparation of this Agreement and, consequently, each Party hereby waives
the application of any rule of Law that would otherwise be applicable in connection with the
interpretation of this Agreement, including but not limited to any rule of Law to the effect that
any provision of this Agreement will be interpreted or construed against the Party whose counsel
drafted that provision.

     Section 3.13 Obligations Limited to Parties to Agreement. Each of the Parties hereto
covenants, agrees and acknowledges that no Person other than PXP (and its permitted assignees) and
McMoRan shall have any obligation hereunder and that, notwithstanding that PXP is a corporation, no
recourse under this Agreement or under any documents or instruments delivered in connection
herewith or therewith shall be had against any former, current or future director, officer,
employee, agent, manager, stockholder or Affiliate of PXP or any former, current or future
director, officer, employee, agent, general or limited partner, manager, member, stockholder or
Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and
acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise by
incurred by any former, current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder or Affiliate of PXP or any former, current or future
director, officer, employee, agent, general or limited partner, manager, member, stockholder or
Affiliate of any of the foregoing, as such, for any obligations of PXP under this Agreement or any
documents or instruments delivered in connection herewith or therewith or for any claim based on,
in respect of or by reason of such obligation or its creation, except in each case for any assignee
of PXP hereunder.

     Section 3.14 Interpretation. Article and Section references to this Agreement, unless
otherwise specified. All references to instruments, documents, contracts and agreements are
references to such instruments, documents, contracts and agreements as the same may be amended,
supplemented and otherwise modified from time to time, unless otherwise specified. The word
“including” shall mean “including but not limited to.” Whenever any determination, consent or
approval is to be made or given by PXP under this Agreement, such action shall be in PXP’s sole
discretion unless otherwise specified.

[Next page is the signature page.]

16

 

     IN WITNESS WHEREOF, this Agreement has been signed by each of the Parties as of the date first
above written.

	 	 	 	 	 
	 	PLAINS EXPLORATION & PRODUCTION COMPANY

 	 
	 	By:  	/s/ Winston M. Talbert
 	 
	 	 	Name:  	Winston M. Talbert 	 
	 	 	Title:  	Executive Vice President and Chief Financial
Officer 	 
	 
	 
	 	MCMORAN EXPLORATION CO.

 	 
	 	By:  	/s/ Kathleen L. Quirk
 	 
	 	 	Name:  	Kathleen L. Quirk 	 
	 	 	Title:  	Senior Vice President & Treasurer 	 
	 

[Signature Page to Registration Rights Agreement]

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