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6.75%
Mandatory Convertible Preferred Stock Offering
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Title
of securities:
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6.75%
Mandatory Convertible Preferred Stock
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Aggregate
amount offered:
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$2,500,000,000
of liquidation preference
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Shares
issued:
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25,000,000
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Liquidation
preference per share:
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$100.00
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Overallotment
option:
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3,750,000
shares
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Price
to public:
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100%
of liquidation preference
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Annual
dividend rate:
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6.75%
per share on the liquidation preference of $100.00 per share ($6.75
per
annum)
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First
dividend date:
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August
1, 2007
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Expected
amount of first dividend
payment per share: |
$2.30625
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| Dividend cap trigger price: | $20.42 |
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Mandatory
conversion date:
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May
1, 2010
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Threshold
appreciation price:
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$73.50
(represents an approximately 20% appreciation over the initial
price)
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Conversion
rate:
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If
the applicable market value of shares of the Company’s common stock is
equal to or greater than $73.50 (the “threshold appreciation price”), then
the conversion rate will be 1.3605 shares of the Company’s common stock
per share of mandatory convertible preferred stock (the “minimum
conversion rate”), which is equal to $100.00 divided by the threshold
appreciation price.
If
the applicable market value of shares of the Company’s common stock is
less than the
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|
threshold appreciation price, but greater than
$61.25
(the “initial price”), then the conversion rate will be $100.00 divided by
the applicable market value.
If
the applicable market value of shares of the Company’s common stock is
less than or equal to the initial price, then the conversion rate
will be
1.6327 shares of the Company’s common stock per share of the Company’s
mandatory convertible preferred stock (the “maximum conversion rate”),
which is equal to $100.00 divided by the initial price.
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Conversion
at option of the holder:
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Other
than during the cash acquisition conversion period, holders of the
mandatory convertible preferred stock will have the right to convert
the
mandatory convertible preferred stock, in whole or in part, at any
time
prior to the mandatory conversion date, into shares of common stock
at the
minimum conversion rate of 1.3605 shares of common stock per share
of
mandatory convertible preferred stock, subject to anti-dilution
adjustments.
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Cash
acquisition conversion rate:
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The
following table sets forth the cash acquisition conversion rate per
share
of mandatory convertible preferred stock for each hypothetical stock
price
and effective date set forth below:
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Stock
Price on Effective Date
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|||||||||||||
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Effective
Date
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$20.00
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$30.00
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$40.00
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$50.00
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$61.25
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$67.38
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$73.50
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$80.00
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$90.00
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$100.00
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$125.00
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$150.00
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$300.00
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March
28, 2007
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1.3050
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1.3652
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1.3726
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1.3658
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1.3554
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1.3502
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1.3457
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1.3416
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1.3368
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1.3334
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1.3291
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1.3281
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1.3347
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May
1, 2008
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1.4252
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1.4606
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1.4508
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1.4281
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1.4026
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1.3907
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1.3806
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1.3717
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1.3611
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1.3536
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1.3436
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1.3403
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1.3435
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May
1, 2009
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1.5291
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1.5508
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1.5363
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1.4993
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1.4529
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1.4306
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1.4117
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1.3954
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1.3772
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1.3653
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1.3520
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1.3489
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1.3517
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May
1, 2010
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1.6327
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1.6327
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1.6327
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1.6327
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1.6327
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1.4842
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1.3605
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1.3605
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1.3605
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1.3605
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1.3605
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1.3605
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1.3605
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If
the stock price is in excess of $300.00 per share, then the cash
acquisition conversion rate will be the minimum conversion rate,
subject
to adjustment. If the stock price is less than $20.00 per share,
then the
cash acquisition conversion rate will be the maximum conversion rate,
subject to adjustment.
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Cash
acquisition dividend make-whole payment:
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For
any shares of mandatory convertible preferred stock that are converted
during the cash acquisition conversion period, in addition to the
shares
of common stock issued upon conversion, the Company must, in its
sole
discretion, either (a) pay holders cash, to the extent it is legally
permitted to do so, the sum of (1) an amount equal to any accumulated
and
unpaid dividends on the mandatory convertible preferred stock, whether
or
not declared, and (2) the present value of all remaining dividend
payments
on the mandatory convertible preferred stock through and including
the
mandatory conversion date, in each case, out of legally available
assets
(the “cash acquisition dividend make-whole amount”), or (b) increase the
number of shares of common stock to be issued on conversion by an
amount
equal to the cash acquisition dividend make-whole amount, divided
by the
stock price of shares of the Company’s common stock; provided
that,
in
no event shall the Company increase the number of shares of common
stock
to be issued in excess of the amount equal to the cash acquisition
dividend make-whole amount divided by $20.42, subject to adjustments
in
the same manner as each fixed conversion rate. The Company may make
the
election to pay cash or increase the conversion rate, in whole or
in part.
The present value of the remaining dividend payments will be computed
using a discount rate equal to 7.00%.
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Net
proceeds of the mandatory
convertible
preferred stock offering after
underwriters’
discount (assuming full
exercise
of the underwriters’
overallotment
option):
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Approximately
$2.8 billion
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Use
of proceeds:
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The
Company intends to use the net proceeds from this offering to repay
outstanding indebtedness under (a) its Tranche A term loan facility
and
(b) its Tranche B term loan facility. The Tranche A term loan facility
and
the Tranche B term loan facility were used to fund a portion of the
acquisition and related transaction costs.
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Underwriters’
discount:
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2.50%
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Trade
date:
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March
22, 2007
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Settlement
date:
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March
28, 2007
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CUSIP:
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35671D782
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The
mandatory preferred stock has been approved for listing on the NYSE
under
the symbol “FCXprM”, subject to official notice of
issuance.
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Common
Stock Offering
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Title
of securities:
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Common
Stock
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Shares
issued:
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41,000,000
(100% primary)
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Overallotment
option:
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6,150,000
shares
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Price
to public:
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$61.25
per share
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Outstanding
common shares after
offering
(assuming the exercise in full of
the
underwriters’ overallotment option):
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381,567,324
(based on the number of shares outstanding as of February 28, 2007,
and
excluding (a) 234,450 shares issuable upon conversion of the Company’s 7%
convertible senior notes; (b) 23,272,163 shares issuable upon conversion
of the Company’s 5.5% perpetual convertible preferred stock; (c) an
aggregate of 8,087,689 shares issuable upon conversion of outstanding
stock options and restricted stock units or the vesting of restricted
stock awards and (d) 46,938,775 shares issuable upon conversion of
the
6.75% mandatory convertible preferred stock, assuming the successful
completion of the concurrent offering thereof and the exercise in
full of
the underwriters’ overallotment option)
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Net
proceeds of the common stock
offering
after underwriters’ discount
(assuming
full exercise of the
underwriters’
overallotment option):
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Approximately
$2.8 billion
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Use
of proceeds:
|
The
Company intends to use the net proceeds from this offering to repay
outstanding indebtedness under (a) its Tranche A term loan facility
and
(b) its Tranche B term loan facility. The Tranche A term loan facility
and
the Tranche B term loan facility were used to fund a portion
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| of the acquisition and related transaction costs. | |
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Underwriters’
discount:
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2.50%
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Last
sale (on March 22, 2007):
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$61.91
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Trade
date:
|
March
22, 2007
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Settlement
Date:
|
March
28, 2007
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CUSIP:
|
35671D857
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